Case: Houghton v Arms [2006] HCA 59 ; (2006) 225 CLR 553
Outcome: distinguished
So much was decided in Houghton v Arms [2006] HCA 59 ; (2006) 225 CLR 553 where the High Court considered the scope of s 9(1) of the Fair Trading Act 1999 (Vic) which provided that: "A person must not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive". The High Court, in substance, rejected the argument that if employees of a company act only as the company, it is the company which engages in the relevant conduct caught by s 9(1) and not the individuals who undertook that conduct. The High Court said at 566: "The appellants are fixed with the findings by the primary judge respecting the conduct in which they engaged, being certain acts and omissions. As indicated earlier in these reasons, these were 'in trade or commerce'. Why then are the appellants not persons who contravened the prohibition imposed by s 9 of the FT Act ? As a general proposition, and as Lord Rodger of Earlsferry stressed in Standard Chartered Bank v Pakistan National Shipping Corporation [No 2] [citation omitted ], ... in the world of tort the status of an individual as an employee does not divest that person of personal liability for wrongful acts committed while an employee. There is no good reason for treating the text of s 9 any differently and, in particular, for construing the section as if it read '[a] person, as principal, must not ...' . 85 Mr Narain submitted that Houghton v Arms (supra) did not support the Commission's case as it concerned the direct and co-existing liability of an employee and corporate principal under the provisions of the Fair Trading Act 1999 (Vic), the operation of which is specifically excluded by s 1041K of the Act . I do not consider that Houghton v Arms (supra) should be read so restrictively and in such a limited way. The High Court's analysis and construction of s 9 of the Fair Trading Act 1999 (Vic) (par [82] above) applies with equal force to s 1041H of the Act . 87 Nevertheless it is still necessary to establish that Mr Narain personally engaged in the relevant conduct of which the Commission complained, that is, that he personally engaged in the conduct of publishing the announcement and making the misrepresentations said to be contained in it. As I have noted earlier, although Mr Narain participated in the preparation and drafting of the 27 September letter and although he instructed the company secretary of CIL to send it to the Stock Exchange, he did not personally publish the letter. CIL sent it to the Stock Exchange through the medium of its company secretary. Nor did he personally make the misrepresentations relied upon by the Commission in the same manner as Mr Mehra did to the Standard Chartered Bank (par [83] above). Houghton v Arms (supra) is an example of a different situation where the individual employees of the company, Messrs Houghton and Student, personally made the relevant misrepresentations. So also in Arktos Pty Ltd v Idyllic Nominees Pty Ltd (supra) where Mr Price, a director the respondent company had personally made the misrepresentation relied upon by the applicant against the company and Mr Price. So also in Standard Chartered Bank v Pakistan National Shipping Corporation [No 2] (supra) where Mr Mehra, the managing director of Oakprime Ltd, signed the letter containing the false statement.