Case: Citibank Ltd v Liu [2003] NSWSC 569
Outcome: cited
The Court observed that the appellants had not only sued the company but also the third respondent and that circumstance indicated that the appellants sought relief against the third respondent. The Court said at [13]: 'The authorities show that a director of a corporation who acts on its behalf in the course of trade or commerce also acts himself or herself in trade or commerce and, if the corporation is liable under a State Fair Trading Act for their conduct, they also attract primary liability under the same statute: Cleary v Australian Co-operative Foods Ltd (1999) 32 ACSR 701 at [54]-[57]; Lauriana Pty Ltd v Corfield Food Warehouse Pty Ltd, unreported, Supreme Court of Western Australia, Wallwork J, 28 April 1995 at 6 and 22; Citibank Ltd v Liu [2003] NSWSC 569 at [53] and the cases there discussed, and Miba Pty Ltd v Nescor Industries Group Pty Ltd (1996) 141 ALR 525 at 541. That is supported in particular by the provision in s 84(2) of the TPA and s 82(2) of the FTA that conduct engaged in on behalf of a body corporate by a director within the scope of actual or apparent authority is deemed 'also' to have been engaged in by the body corporate. It is not correct, as the case for the third respondent asserted, that the principle recognized in these authorities is applicable only when there is a finding of 'separate conduct' by the director; that is, conduct other than in the capacity of director or agent. It is accepted in J D Heydon, Trade Practices Law, Law Book Company, Sydney, 1989 at 18.350 that corporate officers acting in the course of their employment, or in the scope of their authority as agents causing the corporation to be liable under s 84(2) also have personal liability. It is added there that in normal circumstances such officers will be knowingly concerned in the conduct: s 75B(c).' 287 In Citibank Ltd v Liu [2003] NSWSC 569 , an employee of a corporation (Mr Wong), who was not a director, presented draw down notices to a bank for the purpose of certifying certain matters necessary for a lease to the company. The notices contained false representations which were not known to the employee. In those circumstances, accessorial liability under s 75B of the Trade Practices Act did not attach. However, Hamilton J, in the New South Wales Supreme Court, held Mr Wong liable under s 42 of the Fair Trading Act 1987 (NSW) which is the equivalent of s 10 of the Fair Trading Act (WA) . Hamilton J said at [53]: 'In my view, no difference is made to the application of the principle by the fact that the representor on behalf of a corporation is an employee. The fact that he is an employee does not negative the fact that he is acting as an agent. That the FTA may impose liability on employees acting as such is illustrated by Australian Competition and Consumer Commission v McCaskey [2000] FCA 1037 ; (2000) 104 FCR 8. That was a case under the TPA but, as the conduct involved telephone communications, the provisions bound natural persons as well as corporations. The injunctive orders were made by consent, but French J scrutinised them carefully to see that they were authorised by the Act (see at 21). His Honour made orders against the employee who had engaged in the conduct. In Primcom Pty Ltd v Sgarioto (1994) ATPR (Digest) 46-135, a case under the Victorian FTA, Eames J held an estate agent liable for misleading conduct although his principals selling their own house could not be held liable because not engaged in trade or commerce. The FTA proscribes conduct by natural persons. If that conduct is in trade or commerce and cannot be said not to be misleading conduct of the person who engages in it by reason that that person is acting merely as a conduit, in my view the person is not removed from the purview of the Act by the fact he is engages (sic) in the conduct as the employee of another.' 292 That matter went on appeal. The Full Court of the Federal Court in Arms v Houghton [2006] FCAFC 46 discussed the decisions in Arktos Pty Ltd v Idyllic Nominees Pty Ltd, Citibank Ltd v Liu , and Wong v Citibank and concluded at [38] that there was authority both in the Full Court of this Court and in the Court of Appeal in New South Wales that 'an employee can be found to have engaged in misleading or deceptive conduct for actions taken within the scope of his actual authority; that is, not independently of such authority'.