Case: Yorke v Lucas [1985] HCA 65 ; (1985) 158 CLR 661
Outcome: discussed
not expressly pleaded, reliance is placed by the Applicants upon s 75B(1) of the Trade Practices Act , which relevantly provides as follows: (1) A reference in this Part to a person involved in a contravention of a provision of Part ...V ... shall be read as a reference to a person who: (a) has aided, abetted, counselled or procured the contravention; (b) has induced, whether by threats or promises or otherwise, the contravention; (c) has been in any way, directly or indirectly, knowingly concerned in, or party to, the contravention; or (d) has conspired with others to effect the contravention. In order to fall within s 75B(1)(a) it is necessary to prove that a person was aware or ought to have been aware of the facts that gave rise to the contravention and to prove that he intentionally participated in the contravention. But it is not necessary to prove that the person knew that his participation was a breach of the Act: Quinlivan v Australian Competition and Consumer Commission [2004] FCA 175 , 160 FCR 1; Yorke v Lucas [1985] HCA 65 ; (1985) 158 CLR 661 at 666 to 669 per Mason ACJ, Wilson, Deane and Dawson JJ. The particular provision invoked by the Applicants in the present proceeding is s 75B(1)(c). Their Honours in Yorke further relevantly observed at 670 that: 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. ... 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. The Respondent to that proceeding, Lucas, was not liable as an accessory as he did not know that the information he was giving to the prospective purchaser was false. He lacked knowledge of an essential element of the contravention. The authorities and the " controversy " as to the extent of knowledge necessary to bring a person within s 75B have been discussed in Pearce M, "Accessorial Liability for Misleading or Deceptive Conduct" (2006) 80 ALJ 104. A Full Court of this Court revisited the decision in Yorke [1985] HCA 65 ; (1985) 158 CLR 661 and reviewed the previous decision of this Court as to the extent of the knowledge required to make a person " knowingly concerned " in a contravention: Medical Benefits Fund of Australia Ltd v Cassidy [2003] FCAFC 289 , 135 FCR 1. There in issue was s 12GD(1)(e) of the then Australian Securities and Investments Commission Act 1989 (Cth), a provision comparable to s 75B(1)(c) of the Trade Practices Act . The Court there heard two appeals, one in which the Medical Benefits Fund was the appellant; the other in which an advertising agency, Bevins, was the appellant. The primary judge accepted that Bevins did not subjectively appreciate that the advertisements involved were false, misleading or deceptive but found Bevins liable pursuant to s 12GD(1). This conclusion was reversed on appeal. Moore J reviewed the authorities on the analogous provision here in issue, s 75B , and concluded: [14] ... It follows, on his Honour's findings, that Bevins (through its officers and employees) was not aware of the second of the matters, as I earlier described them, constituting the contravening conduct of MBF. That is, while Bevins was aware of what the advertisements contained (necessarily so given that it created them) it was not aware that the advertisements might lead members of the public to believe that certain benefits would be enjoyed or rights conferred by taking out insurance with MBF. Accordingly, in my opinion, his Honour erred in concluding that Bevins was liable as an accessory under s 12GD(1). [15] I should add that, in my opinion, liability as an accessory (in circumstances where the contravening conduct of the principal was making false or misleading representations) does not depend on an affirmative answer to the question whether the alleged accessory knew the representations were false or misleading. All that would be necessary would be for the accessory to know of the matters that enabled the representations to be characterised in that way. ... Mansfield J agreed with Moore J. In a separate judgment, Stone J similarly concluded: [80] It is well established that neither knowledge nor intention is necessary for there to be a contravention of s 52 of the TPA or of s 12GA of the ASIC Act. It is sufficient (and necessary) that the conduct in question can be accurately described as "misleading or deceptive" or "likely to mislead or deceive". This misleading or deceptive character is a question of fact that must be decided in the context of all the surrounding circumstances; Taco Co of Australia Inc v Taco Bell Pty Ltd [1982] FCA 136 ; (1982) 42 ALR 177 at 202. That "fact" is an essential element of the contravention. It follows that to be liable as an accessory one must have knowledge of the misleading and deceptive character of the relevant conduct. ... [82] This is not to say that to be liable as an accessory to a strict liability breach of s 52 it is necessary to know that the conduct of the principal is unlawful, or indeed to have any knowledge of the provisions of the TPA or the ASIC Act. But it is necessary to know the essential elements of the contravention, by which I understand that one must know that which makes the conduct a contravention; in this case, its misleading and deceptive character. Only then can one form the intention to participate in conduct of that character. Liability of Directors and Joint Tortfeasors