NSW Supreme Court Rejects Claim for Misleading Conduct Damages

The court dismissed the claimant's claim for damages alleging misleading or deceptive conduct under the Fair Trading Act 1987 (NSW). The court found that the claimant did not rely on the alleged inducement and did not suffer actual damages.

New South Wales Supreme Court

CITATION : The Beautiful Body Co (Intl) Pty Limited v [NAME] [2009] NSWSC 91

HEARING DATE(S) : 23, 24, 25 February 2009

JUDGMENT DATE : 18 March 2009

JUDGMENT OF : Hammerschlag J

DECISION : The plaintiff's claim dismissed with costs

CATCHWORDS : TRADE PRACTICES – claim for damages for conduct alleged to be misleading or deceptive within s 42(1) Fair Trading Act 1987 (NSW) – allegation that defendant individuals represented that plaintiff was dealing with a particular entity and that defendant individuals represented they had authority to commit particular entity to a licensing agreement with the plaintiff when in fact they did not – claim that third defendant company was a person involved in the contravention – claimed that plaintiff suffered damages being commitments that it undertook in conducting a business having believed it obtained the rights under the licensing agreements to do so – held that individual defendants' conduct was in the circumstances not misleading or deceptive because it was not capable of misleading the plaintiff – held no damages suffered because plaintiff did not rely on the alleged inducement and in any event no damage proved – held that company defendant was not knowingly involved in any event because its guiding minds were not aware of the material facts constituting the contravention even if there was one

LEGISLATION CITED : Fair Trading Act 1987 (NSW)

CATEGORY : Principal judgment

Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd (1982) 149 CLR 191 [NAME] of Australia Inc v Taco Bell Pty Ltd (1982) 2 TPR 48 Yorke v Lucas (1985) 158 CLR 661 Wardley Australia Ltd v Western Australia (1992) 175 CLR 514 I & L Securities Pty Ltd v HTW Valuers (Brisbane) Pty Ltd (2002) 210 CLR 109 CASES CITED : Anema E Core Pty Ltd v Aromas Pty Ltd [1999] FCA 904 Briginshaw v Briginshaw (1938) 60 CLR 336 Helton v Allen (1940) 63 CLR 691 Rejfek v McElroy(1965) 112 CLR 517 Watson v Foxman (2000) 49 NSWLR 315 Macmillan v Mumby & Another [2006] NSWCA 74

The Beautiful Body Co (Intl) Pty Limited ACN 101 263 852 PARTIES : [NAME] [COMPANY] 104 913 046

FILE NUMBER(S) : SC 50114/2007

COUNSEL : [redacted] P. [NAME] (Defendants)

SOLICITORS : [redacted] [NAME] (Defendants)

- 36 - IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION COMMERCIAL LIST

HAMMERSCHLAG J

18 MARCH 2009

50114/2007 THE BEAUTIFUL BODY COMPANY (INTL) PTY LIMITED ACN 101 263 852 -v- [NAME] & 2 ORS JUDGMENT

INTRODUCTION

1 HIS HONOUR: The plaintiff sues the first defendant ("[NAME]") and the second defendant ("[NAME]") for damages it says it suffered by conduct on their part which it alleges was misleading or deceptive or likely to mislead or deceive in contravention of s 42(1) of the Fair Trading Act 1987 (NSW) ("the Act").

2 The plaintiff sues the third defendant company ("[NAME]"), of which [NAME] are the shareholders and directors, as a person allegedly involved in the contravention.

FACTUAL BACKGROUND

The [NAME] rights

3 [COMPANY] (often called [NAME] or DJ) is a well-known Australian departmental store with outlets across the country. 4 Some of its stores have hair and beauty salons. 5 [NAME] has been involved in the beauty industry for many years. She has a reputation in that industry. Her and [NAME] are husband and wife. [NAME] is a business man. 6 On 13 April 2005 a company known as [COMPANY] (ACN 113 802 672) ("[NAME]") was incorporated. 7 On its incorporation [NAME] each owned twenty per cent of [NAME], and were directors. The remaining sixty per cent was held by four individuals (including a Mr [NAME]) all of whom were associated with an enterprise known as [COMPANY]. 8 On 29 April 2005 [NAME] entered into a written Retail Brand Management Agreement with [NAME] under which [NAME] was given the right to conduct the business of hair and beauty salons in identified [NAME] stores for a period of three years, with one option for renewal of three years ("the [NAME] rights"). 9 [NAME] started trading on 3 May 2005. By December that year it was operating twenty-four salons. One discrete service which those salons offered was [NAME]. [NAME] traded under the name "[NAME]". 10 [NAME] fell into conflict with other shareholders in [NAME]. [NAME] was looking for a way to resolve the problem by excluding the other shareholders (other than Mr [NAME]) from participation in KBH Co. 11 To achieve this result, a number of steps were taken. 12 On 8 [NAME] resigned as directors of [NAME]. 13 On 12 December 2005 [NAME] sold and transferred its business to a company called [COMPANY] ("[NAME]") of which [NAME] were the sole shareholders and directors. 14 Also on that day, a Novation Deed was entered into under which [NAME] agreed to substitute [NAME] for [NAME] as the party having the [NAME] rights. 15 On 19 December 2005 voluntary administrators, [NAME], were appointed to [NAME]. 16 On conclusion of these steps [NAME], which was controlled by [NAME], owned the beauty and hair salon business and held the [NAME] rights, and [NAME] was no longer trading. [NAME] 17 At material times [COMPANY] had the exclusive right to import from France and distribute in Australia Yperion Intermittent [NAME] machines. 18 [NAME] licensed [COMPANY] to import and distribute the machines in Australia. The machines were commonly referred to as [NAME] machines. 19 [NAME] machines work in conjunction with what are described as "shot cards". These cards empower the machine to work a specific number of times or "shots". Introduction of the plaintiff and negotiations leading to the entry into of the Licence Agreement

20 The plaintiff is a company owned by [NAME]. Its directors have at all material times been [NAME] and his associate [NAME]. 21 [COMPANY] and its subsidiary [COMPANY], are companies associated with [NAME]. They provide consulting services in the information technology sector. 22 In 2005 [NAME] became interested in becoming involved in franchising [NAME] businesses. He was introduced to [NAME] by [NAME] who was then involved in [NAME] businesses. [NAME] had an arrangement with [NAME] to assist it in its [NAME] businesses. [NAME] was associated with a [NAME]. [NAME] and Mr [NAME] told [NAME] in mid 2005 that [NAME] had a licence to operate beauty salons in [NAME]' stores. 23 The plaintiff wished to enter the [NAME] business by acquiring the right to operate such business in the [NAME] stores.

24 Negotiations between [NAME] and [NAME] commenced initially with a view to [NAME] acquiring [NAME] machines and then with a view to him taking over the [NAME] component of [NAME]'s beauty and hair salon business. 25 On 17 November 2005 on a [COMPANY] letterhead, [NAME] recorded that [NAME] had agreed to [NAME]'s "proposed new company" using the [NAME] name, it being planned that that company would provide a range of [NAME] personal services through salons based around Australia based on the use of [NAME] machines which would be supplied by [COMPANY]. In the letter [NAME] stated, amongst others, the following: " On behalf of the new company (yet to be formed) we wish to order twenty LS600 [NAME] machines from [NAME] for the landed cost of $5,000 each. · We agree to enter into discussions with the respective companies regarding final payment for these machines… I have taken the liberty of documenting this matter sin (sic) this preliminary form as we will be starting several new staff next week and it will be good to have a common basis for understanding our agreed arrangements. We will also be working hard to prepare and finalise a joint heads of agreement in which all these matter can be detailed and mutually agreed…" 26 On 8 December 2005 [NAME] sent to [NAME] proposed Heads of Agreement between [NAME] and [NAME]. One of the provisions in the proposed Heads of Agreement was: "Continuation of this agreement as far As (sic) DJ outlets are treated is concurrent with [NAME] tenure and NO damage shall accrue at termination of the DJ agreement". 27 In December 2005 [NAME] re-named the plaintiff, which was one of his "old companies", [COMPANY] to be the vehicle for operating the [NAME] business. In the dealings between the parties the plaintiff was sometimes referred to as [NAME]. Where appropriate I shall refer to it in that way. 28 [NAME]'s evidence was that between 12 and 14 December 2005 he had a conversation with [NAME] to the following effect: "[NAME], just to let you know, I've now done it. I've cleaned up that bucket of mud, if you know what I mean. I have bought the [NAME] beauty salons business and I now control the business. The old company is no longer trading and is going to be wound up. Everything else will be the same, DJ's insisted on that. It will be kept quiet. It will still be called "[NAME]" but the owner will be a new company with [NAME] and I called [COMPANY]. DJ's have redone the licence with [NAME] and I. I have taken over the assets and most of the liabilities. You will be looked after. Effectively, it gets rid of the crooked shareholders and directors. [NAME] is coming in with us to help fund it. As soon as we have a chance we will do your contract." 29 The conversation was not denied by [NAME]. 30 He says that just before Christmas Day 2005 he received notification that [NAME] had been placed into voluntary administration on 19 December 2005 by its directors. [COMPANY] had done some work for [NAME] earlier in 2005 and he, as an unpaid creditor, received notification from the administrator. 31 He says he immediately telephoned [NAME] to ask him what was going on and was told that he had problems with two of his shareholders and he had placed the company into administration to deal with that problem. Amongst others, he says [NAME] told him he would be able to sort it out and that [NAME] should not be concerned about their proposed future arrangements. 32 He says that [NAME] informed him that he had a company called [COMPANY] which was taking over the running of the business so that he could rid himself of his troublesome shareholders.

33 On 19 December 2005 [NAME] wrote to [NAME] on a letterhead which has the following heading: "[COMPANY] as [NAME]" 34 The letter was addressed to [NAME] as "Director, [COMPANY]". [NAME] wrote the following: "We are pleased to formalise the business relationship that has been the subject of discussion between [NAME] and [NAME] executives for some time. We believe that we have now reached agreement on all the key points and wish to bring this matter to a formal contractual conclusion. We have prepared a Deed of Agreement based upon our extended discussions that seeks to delineate the relationship between [COMPANY] and [NAME]. Similar documents are in the process of being prepared for review and agreement by [NAME] and [COMPANY]. The key points in the Deed of Agreement are as follows: 1. [NAME] is given the right to use the [NAME] name, "brand" and image in all of its business activities. We have assumed that this right will be assigned by the current owner of the [NAME] names, "brand" and image directly to [NAME] for this purpose. 2. [NAME] will trade as [NAME]. The location of the clinics will be subject to review by [NAME] but would not be located within the same shopping centre as a [NAME] outlet or within 200 meters of an existing [NAME] location; 3. [NAME] assumes responsibilities for all current [NAME]'s '[NAME]' operations from start of business, 4. [NAME] will acquire the rights to the existing 16 machines currently located in the [NAME] salons located within [NAME] from [NAME]; 5. [NAME] will undertake to place [NAME] equipment in those [COMPANY] salons that do not have [NAME] equipment once the business demand has been assessed and agreed; 6. [NAME] will purchase PULSES for the month of December from [NAME], from a date that has yet to be determined, with the initial date of any payments to [NAME] being the effective date of this agreement. 7. [NAME] will employ [NAME] or his nominated entity to assist in the promotion, advertising, marketing and management of the [NAME] business and the delivery of its services on an extended period royalty and personal services contract; 8. [NAME] will pay [NAME] 45% of all the [NAME] '[NAME]' income generated in the [NAME] salons located in [NAME] stores where [NAME] staff perform the [NAME] service;

9. Subject to the terms and conditions in the contract between [NAME] and [NAME] will have the option to install their own staff within [NAME] salons as workload dictates; 10. [NAME] will pay [NAME] 25% of all the [NAME] '[NAME]' income generated in the [NAME] salons located in [NAME] stores where [NAME] staff perform the service; 11. [NAME] will trade as [NAME]; 12. [NAME] will have the right to assign its interest in this agreement to suitable third parties. Not agreed We are confident that the attached Deed of Agreement covers these key maters, as well as other matters of a more operational nature. We would like to thank you and your fellow Directors for the opportunity to work closely [sic] your company on this business opportunity and in future years. We also wish to assure you all that it our (sic) intention to make this new business venture an outstanding success for all its stakeholders." 35 A proposed Deed of Agreement accompanied the letter. The proposed parties were the plaintiff and [NAME]. 36 Clause 4 of the proposed deed was in the following terms: "Term a. [NAME] will assume control and management of [NAME] operations on opening of business on (DATE TO BE DETERMINED); b. The term of this agreement will be co-terminus with the [NAME] concession contract with [NAME]. [NAME] has the first/last option to extend the arrangement for further periods, at no cost, these being co-terminus with any extension of the [NAME] concession;" 37 On 23 December 2005 [NAME] sent a further letter to [NAME] addressed in the same way as the 19 December 2005 letter, enclosing a further draft Deed of Agreement between the plaintiff and [NAME] in the following terms. Clause 4 of that draft: " Term (a) [NAME] will assume control and management of [NAME] operations on opening of business on 12th December 2005, (this date being based upon advice received from [NAME]) the date on which we understand that the [NAME] concession in [NAME] was transferred from [NAME] to [NAME]; (b) The term of this agreement will be co-terminus with the [NAME] concession contract with [NAME]. [NAME] has the first/last option to extend the arrangement for further periods, at no cost, these being co-terminus with any extension of the [NAME] concession;" 38 [NAME] and [NAME] met [NAME] on 6 January 2006. 39 On 12 January 2006 [NAME] again wrote to [NAME] providing a further draft of the proposed agreement again between the plaintiff and [NAME]. In clause 1, entitled Scope of Agreement, the following appeared: "This is an exclusive arrangement and [NAME] will be provided with access to the information needed to monitor and manage its business operations within the existing [NAME] salons and allow the development of new [NAME] clinics and salons within [NAME]." 40 [NAME] retained a solicitor, [NAME], to assist with the agreement. [NAME] had had some involvement with proposed earlier arrangements involving [NAME]. 41 [NAME] called [NAME] on 16 January 2006. According to [NAME] he had become aware late in 2005 that [NAME] had entered administration and that a fresh company was to be formed to take over the [NAME] beauty salon businesses. 42 [NAME] forwarded the draft agreement and letter dated 12 January 2006 to [NAME]. [NAME] commenced to consider and then redraft the agreement. 43 [NAME] says he had a telephone conversation with [NAME] on 20 January 2006 in which [NAME] said words to the following effect: "I'm calling to let you know that I have sorted out the Shareholders and cleaned up that "bucket of mud". I've just come from a meeting with the administrators. I've bought the company and I have full control. I will continue to use [COMPANY] to provide hair and beauty services." 44 This conversation is contested. 45 [NAME] accepts that at an earlier point he told [NAME] that he had sorted out the "bucket of mud", that he had bought the business and that he had full control of it. He denies ever having told [NAME] that he had bought "the company". 46 On 30 January 2006 [NAME] met [NAME]. A conversation to the following effect took place: [NAME]: [NAME], I understand you have formed a new company for the [NAME] salons. I need you to confirm the details of the name, ACN and ABN of that company. [NAME]: We had to close down [COMPANY] late last year because [COMPANY] failed to come up with the funding needed for the early stages of the business. We sold the hair and beauty salon business and the [NAME] salon licence to a new company owned by [NAME] and me, with the consent of [NAME]. [COMPANY] now has administrators appointed. 47 [NAME] also asked [NAME] to send him confirmation of the names, ACNs and ABNs of all the various companies that were and had been involved in the [NAME] hairdressing and beauty salons. 48 [NAME] is an administrative assistant who works within [NAME]'s and [NAME]'s business organisation. On 30 January 2006 she sent an email to [NAME] in the following terms: "Please be advised that I am in the process of obtaining the information on the names of the companies as requested. Details I have so far are:- [COMPANY]: 113 802 672 ABN: 81 113 802 672 As soon as I have further information I will advise you accordingly." 49 [NAME] redrafted the agreement which had earlier been sent to him and sent his first draft to [NAME] on 1 February 2006. 50 The parties to [NAME]' draft were "[NAME] (ACN )", "[COMPANY] (ACN )", "[COMPANY]", and "[NAME]". 51 [NAME] forwarded the draft to [NAME] on 3 February 2006. 52 Between 3 and 15 February 2006 [NAME] and his secretary [NAME] had several conversations and a conference with [NAME] which led to the amendment of the first draft agreement which [NAME] had prepared. According to [NAME] during one conversation he said to [NAME]: "You need to make sure all the parties are correctly identified. We have not included the ACNs for any of the parties because you have not confirmed what they are." 53 That draft was between the same proposed parties (excluding [NAME]) as the earlier draft – still without the inclusion of ACN numbers. 54 On 15 [NAME] wrote to [NAME] enclosing the first draft amended agreement. His covering letter concluded as follows: "I still don't have the ACN numbers for the new [NAME] and if you could give me [NAME] as well and [NAME]." 55 On 17 February 2006 [NAME] met with [NAME] and [NAME]. They discussed the draft agreement. [NAME] sent a marked-up version of the agreement to [NAME] on 20 February 2006. 56 The parties were shown as before, still with no ACN numbers. 57 On 20 February 2006 [NAME] went into liquidation. 58 On 21 February 2006 [NAME] faxed to [NAME] a copy of the draft proposed agreement with handwritten notes. 59 [NAME] emailed [NAME] on 21 February 2006 a modified draft agreement still without ACN numbers. [NAME] had no further involvement in settling the agreement and never saw the final version.

The "Licence Agreement" 60 On 23 February 2006 a document entitled Agreement to Licence was executed. I shall refer to this document as the "Licence Agreement". 61 On its face the parties were [NAME], the plaintiff and [NAME]. [NAME] was defined as "[NAME]". The plaintiff was defined as "[NAME]". 62 Under it [NAME] agreed to grant to the plaintiff "the right to conduct the [NAME] business within DJ's and the DJ's Hairdressing and beauty salons which is an exclusive right." 63 The Licence Agreement contained the following recitals: "RECITALS A. [COMPANY] by its retail stores which it either owns/or operates has in the past granted concessional licenses to an operator to operate the hair dressing and beauty salons so located within their premises subject to terms. B. AND [NAME] has entered a concessional license agreement with [COMPANY] (hereinafter referred to as 'DJ's") to conduct the hairdressing and beauty salons utilising space provided by DJ's in each of its relevant retail stores hereinafter described. C. AND [NAME] by its predecessor granted to [NAME] the right to operate and manage as part of the [NAME] business the business of [NAME] utilizing solely equipment as provided by [COMPANY] pursuant to a license granted by [COMPANY] through [NAME] to operate the [NAME] equipment hereinafter described or any updated equipment. D. AND [NAME] and [NAME] have been requested to release [NAME] from his obligations pursuant to the aforementioned Agreement and enter a fresh commercial arrangement with [NAME] whereby [NAME] is given the right/license to use the [NAME] brand name and image in all of its [NAME] related business activities within the [NAME] retail stores and in other places subject strictly to the terms of this Agreement." 64 Clause 2.1 of the Licence Agreement was in the following terms: "[NAME] hereby grants to [NAME] the right to conduct the [NAME] business within DJ's and the DJ's hairdressing and beauty salons which is an exclusive right." 65 Clause 3.1 of the Licence Agreement provided that "…the licence shall be for the period as defined in Schedule 1, item 5 from the date of this Agreement (subject to the termination provision of this Agreement as set out in clause 18 but always limited to the duration of the Agreement between [NAME] and DJ's.)" (emphasis added) 66 Clause 12 of the Licence Agreement was in the following terms: "12.1 [NAME] acknowledges all Gross Revenue generated within the [NAME] within the DJ retail stores is first received and paid to [NAME]. 12.2 [NAME] will forward on a weekly basis particulars of Gross Revenue directed by [NAME] from its operations in the business of [NAME] and pay the said sum to [NAME] (subject to 12.4) within forty eight (48) hours of receiving the particulars and the money from [NAME]. 12.3 The parties acknowledge and agree the first such payment shall commence notwithstanding the terms of this Agreement as relates to payments received with respect to the existing [NAME] business as and from February 5, 2006 such payment to be made within fourteen (14) days from the commencement date of this Agreement. 12.4 The parties further acknowledge and agree [NAME] shall be entitled to deduct from the payment referred to in 12.2, 25% of all [NAME] related income and/or gross revenue generated by [NAME] by virtue of its operation as a [NAME] business in the DJ's hair and beauty salons representing [NAME]'s cost of infrastructure and facilities used by [NAME] to conduct the business. 12.5 The parties further acknowledge and agree that so long as [NAME] continues to use the services of suitably trained [NAME] staff in part or otherwise to provide its [NAME] services, [NAME] shall be entitled to receive an additional payment of 20% of all Gross Revenue generated by [NAME]'s business within the DJ's retain stores by way of compensation and/or payments to [NAME] with respect to its staffing costs. The 20% payment shall be 20% of Gross Revenue generated by [NAME] staff calculated before the payments referred to in 12.4. 12.6 Gross Revenue from gift vouchers and other methods of pre-purchasing [NAME] services will not be recognised or payable to [NAME] immediately but will be paid to [NAME] as each associated customer visit to a salon occurs and the deferred income from the pre-purchase is recognised by [NAME] and [NAME] and [NAME]."

The events after the Licence Agreement 67 It is not altogether clear when the plaintiff commenced operating the [NAME] businesses at the [NAME]' outlets, but as at the date of the Licence Agreement it was doing so. As early as 19 December 2005 [NAME] had described [NAME] as "Trading as [NAME]". 68 [NAME] machines which had been ordered from [NAME] by the plaintiff were installed in [NAME]' stores. According to [NAME] related entities borrowed from various finance companies to acquire them for the benefit of the plaintiff. 69 By the end of March 2006 [NAME] was considering acquiring the entire beauty salon business of [NAME]. 70 On 31 March 2006 he sent a memorandum to [NAME] which referred to the "current agreement between [NAME] and DJ's". 71 On 5 April 2006 [NAME] wrote to [NAME] concerning the proposal that the plaintiff acquire a hundred per cent interest in the business operations. The letter referred to a conversation between them in which [NAME] had suggested that the plaintiff's offer be amended "in the following key ways": "1. That any business and/or due diligence period be undertaken in a more timely manner. You stated that you would be willing to assist this process by providing [NAME] with indemnification against any losses or damage suffered by the company and/or its Directors, officers and employees for any past actions and transgressions by [NAME] and/or its current and previous shareholders and directors from any source from the date of the transfer of responsibility to [NAME] of [NAME].

2. That instead of a $500,000 performance bond, [NAME] agree to provide an immediate $500,000 in funding to [NAME], either as cash injection in return for a 49% equity interest in [NAME], or a purchase of shares from the existing [NAME] share holders ([NAME] and [NAME]), with them providing the cash injection of $500,000 directly into [NAME] to be used for funding [NAME] only business activities and operations;

3. That the current shareholders in [NAME] would agree to transfer their remaining equity (51%) to [NAME] for $1 when the commercial lien (currently $1,500.00) held by [NAME]'s Bank of certain assets had been reduced down to the sum of $500,000 by the payment of various services and other payments as set out in our previous letter dated 3 4 2006.

4. That the current Directors of [NAME] would seek to offer additional financial support to [NAME] (sic) while it was operating [NAME] by providing other financial relief through other complementary businesses, sources and channels, including such options as providing retail beauty products at a lower cost price or on a more flexible trading basis. This could be done with [NAME] beauty products provided a regular (weekly) base payment model with quarterly financial reconciliations and adjustments." 72 [NAME] wrote a second letter dated 5 April 2006 to [NAME] in which he said, amongst others, the following: " Re Letter of Interest to acquire the business interests of [NAME] In the letter I forwarded to you on this matter yesterday afternoon, I mentioned that we would like some financial and other operational information to assist our advisors complete a limited due diligence process. In that letter, I undertook to forward to (sic) a brief list of our information based (sic) and other requirements. I am pleased to do that. As stated, our advisors would like to see the following information. We will be happy to receive it in hard copy, softcopy via email or during a face-to-face meeting with key [NAME] finance and/or accounting staff. We would like to see or have access to the following information:

1. Documents on which the company was established and its ACN 2. All returns lodged by the company since its formation(BAS, PAYG AND ASICO)

3. A copy of all current back statements 4. A copy of all current corporate Balance Sheet/Profit and Loss statement 5. Specific information on the contents and background to the Trade Debtors Control a/c 6. A complete list of the current A/P and A/R accounts 7. A full and current statement of account for all the Company's current indebtedness to its Bank and other lenders 8. A copy of instruments entered into by the company with its lenders and other suppliers 9. A sample of all key employee contracts and agreements 10. A copy of all committed future expenses 9advertising etc.)(sic)

11. A copy of all agreements and contracts entered into regarding the Head Office space at Waterloo 12. Any commitments being carried by [NAME] as a result of the liquidation of [NAME]. (emphasis added)

13. The current status of the staff superannuation fund and/or other statutory obligations of the company to the Government and its employees." 73 By April 2006 there was tension between [NAME]'s interests and [NAME]'s interests because, according to [NAME], "[NAME]" had failed to meet invoices for what the plaintiff had claimed were its share of revenue from [NAME]. 74 The plaintiff in turn did not pay money which it owed [NAME] for shot cards. 75 The plaintiff complained that the [NAME] generated [NAME] weekly income was not coming through as per the terms of the Licence Agreement. 76 According to [NAME] was trading at a loss and many of the individual [NAME] beauty salons were not profitable. They sought [NAME]' agreement in July and August to close certain of the salons after Christmas 2006. 77 On 19 August 2006 a conversation between [NAME] and [NAME] to the following effect took place: "[NAME]: You're using my people and my machines and I am taking the business back. You are not meeting your advertising budgets so you are in breach. [NAME]: That is unfair as those are the terms of our agreement and we are only short of cash because you owe us more than $100,000 in unpaid [NAME] sales revenue. We have not paid [NAME] because they have agreed to wait for payment until [NAME] pays their unpaid invoices but we are still ahead of the requirements for all our contractual commitments to [NAME]." 78 During the latter half of 2006 [NAME] continued to negotiate with [NAME] for the purchase by the plaintiff of the entire beauty salon business. 79 On 10 November 2006 [NAME] emailed to [NAME] and [NAME] a draft Deed of Agreement between [NAME] and the plaintiff described as Agreement to Manage, Licence and Acquire. The recitals to that draft include the following: "2. AND [NAME] has entered a concessional license agreement with [COMPANY] (hereinafter referred to as 'DJ's") to conduct the hairdressing and beauty salons utilising space provided by DJ's in each of its relevant retail stores hereinafter described. … 4. AND [NAME] has agreed to enter into a commercial arrangement with [NAME] whereby [NAME] licenses [NAME] to use the [NAME] brand, name and image in all of its Hair & Beauty related business activities within the [NAME] retail stores and in other places subject strictly to the terms of this Agreement." 80 On 30 November 2006 [NAME] wrote to [NAME] referring to a meeting on Wednesday 29 November during which [NAME] had been informed that the provisional offer "made to the Directors of [NAME] to acquire the business and operational assets of your company several weeks ago…" was withdrawn. The letter was addressed to "Mr [NAME] [COMPANY]". 81 In the letter [NAME] set out the rationale behind withdrawal of the conditional offer. 82 On 1 December 2006 [NAME] wrote a further letter to [NAME] addressed in the same way presenting a further proposal "to [NAME] for its consideration". 83 On 1 February 2007 voluntary administrators were appointed to [NAME] and it went into liquidation on 28 February 2007. THE ACT The relevant sections 84 Section 42(1) of the Act (which is in Part 5) provides as follows: (1) A person shall not, in trade or commerce, engage in conduct that is misleading or deceptive or likely to mislead or deceive. 85 Section 68(1) of the Act (which is in Part 6) provides as follows: (1) A person who suffers loss and damage by conduct of another person that is in contravention of a provision of Part…5 (section 43 excepted)…may recover the amount of the loss or damage by action against the other person or against any person involved in the contravention. 86 Section 61 of the Act provides as follows: A reference in this Part to a person involved in a contravention of a provision of the Act 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. The legal principles pertinent to the application of the Act 87 The following precepts are now well established with respect to the sections of the Act earlier referred to: a conduct is misleading or deceptive within section 42(1) of the Act if it induces or is capable of inducing error: b whether conduct is misleading or deceptive is a question of fact; c where the conduct consists of a misrepresentation (which is often but not always the case), it is not misleading unless the person to whom the representation is directed labours under some error; d intention to mislead is not necessary; e in order to be "knowingly concerned" in a contravention a person must have knowledge of the essential facts constituting the contravention; f "knowingly" means actual and not constructive knowledge; g in order to recover damage the plaintiff must prove that loss of damage suffered was "by" conduct in breach of the Act. This means that the loss must be caused by the conduct complained of whether that is the case, is to be determined by approaching the matter in a common sense and practical way; h the conduct complained of need not be the only cause of the plaintiff's loss or damage; i the plaintiff bears the onus of proving its loss; j where a purchase of business is induced by a representation, it is not enough to show, in order to recover losses subsequent to purchase, that the transaction of purchase was induced by the representation and that the losses would not have occurred but for the transaction. What has to be shown is that the loss flows directly from the inducement. See: Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd (1982) 149 CLR 191; [NAME] of Australia Inc v Taco Bell Pty Ltd (1982) 2 TPR 48; Yorke v Lucas (1985) 158 CLR 661; Wardley Australia Ltd v Western Australia (1992) 175 CLR 514; I & L Securities Pty Ltd v HTW Valuers (Brisbane) Pty Ltd (2002) 210 CLR 109; Anema E Core Pty Ltd v Aromas Pty Ltd [1999] FCA 904.

THE PLAINTIFF'S CASE 88 There is no issue that, on 23 February 2006 [NAME] had no authority to commit [NAME] to anything. They were then no longer directors and the company had voluntary administrators. Moreover, about ten weeks earlier [NAME] had divested itself of its business and the [NAME] rights had been transferred to [NAME]. 89 Ms [NAME] of counsel who appeared for the plaintiff put the following: a [NAME] engaged in conduct that was misleading or deceptive by representing to the plaintiff (contrary to the fact) that the plaintiff was dealing with [NAME], when it could not have been doing so; b the misrepresentation was first made during the telephone conversation which [NAME] says he had with [NAME] on 20 January 2006 when according to him [NAME] conveyed that the party which would be entering into the licensing agreement with the plaintiff was [NAME]; c the misrepresentation was reinforced by the insertion into the Licence Agreement (before execution) of [NAME]'s name as a contracting party, and then repeated when [NAME] purported to execute the Licence Agreement on behalf of [NAME]; d had the plaintiff known that it was not dealing with [NAME] it would not have entered into the Licence Agreement. It would not have contracted with [NAME] to the [NAME] rights but would have taken some other course; e the plaintiff suffered loss by incurring financial obligations it otherwise would not have incurred, namely: i. $422, 310.48 which it owes to the [COMPANY] which financed the leasing of the [NAME]; and ii. $165,000 which it owes to [COMPANY] for "Contracted Business Services" rendered by that company from February to November 2006 inclusive at $16,500 per month; f [NAME] was knowingly involved in the conduct complained of because [NAME] are its directors and were aware of their lack of capacity to bind [NAME]. 90 No claim for damages for breach of warranty of authority is made against [NAME] or [NAME]. THE DEFENDANTS' CASE 91 [NAME] of counsel who appeared for the defendants put the following: a the oral representation alleged by the plaintiff to have been made in the 20 January 2006 conversation was not established on the evidence; b even though on the face of the Licence Agreement [NAME] was the licensing party, in reality it was [NAME].

Accordingly, the representation by [NAME]'s and [NAME]'s execution purportedly on behalf of [NAME] was not misleading or deceptive or likely to mislead or deceive; c the plaintiff did not suffer any damage "by" the conduct complained of because: i. had the error been disclosed, the plaintiff would nevertheless have contracted with [NAME], orat the lowest the plaintiff failed to establish that it would have taken some course other than entering into a Licence Agreement with [NAME]; ii. the losses it claims it suffered (if it made such losses) result from the "inducement" which it alleges, namely the representation that [NAME] was the contracting counter party; d [NAME] was not knowingly involved in my contravention (even if there was one) because [NAME] were not aware of the error that had been made. THE ISSUES 92 The issues which arise for determination are accordingly as follows: a whether the plaintiff has established the oral misrepresentation it claims was made in the 20 January 2006 telephone conversation; b whether the insertion into the Licence Agreement of [NAME] as the licensing party and the execution by [NAME] purportedly on behalf of [NAME], was in all the circumstances, misleading or deceptive; c if the answer to either (a) or (b) is yes, whether the plaintiff suffered any loss by the conduct complained of; and d whether [NAME] was a person knowingly involved in the contravention. THE 20 JANUARY 2006 CONVERSATION 93 The allegation of misrepresentation by way of this conversation is only against [NAME]. There is no suggestion that [NAME] was a participant in it or was aware of it. 94 In December 2005 [NAME] had told [NAME] that [NAME] was to be the contracting vehicle. 95 The essence of what [NAME] conveyed was that the contracting party would no longer be [NAME] but would be [NAME]. 96 Where a party seeks to rely upon spoken words as a foundation for a cause of action the conversation must be proved to the reasonable satisfaction of the Court. This means that the Court must feel an actual persuasion of its occurrence or its existence. In the absence of some reliable contemporaneous record or other satisfactory corroboration, a party may face serious difficulties of proof. Such reasonable satisfaction is not a state of mind that is obtained or established independently of the nature and consequences of the fact or facts to be proved. The seriousness of an allegation made, inherent unlikelihood of an occurrence of a given description, or the gravity of the consequences flowing from a particular finding are considerations which must affect the answer to the question of whether the issue has been proved to the reasonable satisfaction of the Court. Reasonable satisfaction should not be produced by inexact proofs, indefinite testimony, or indirect inferences: see Briginshaw v Briginshaw (1938) 60 CLR 336 at 362; Helton v Allen (1940) 63 CLR 691 at 712; Rejfek v McElroy (1965) 112 CLR 517 at 521; Watson v Foxman (2000) 49 NSWLR 315 at 319. 97 There is no objective contemporaneous or near contemporaneous material, record or other satisfactory corroboration of the conversation. I feel no actual persuasion of its occurrence. 98 To the contrary, there are a number of considerations, some objective, which make its occurrence unlikely. 99 Firstly, according to [NAME] said he had just come from a meeting with the administrators. But there is no evidence that [NAME] had attended any meeting with the administrators on that day. No evidence from the administrators was called. 100 Secondly, [NAME] had not bought "the company". He clearly had an understanding of the difference between buying a company and buying a business. 101 Thirdly, the transactions which gave him control of the business had occurred weeks before rather than on or shortly before 20 January 2006. [NAME] had weeks before acquired the right to use the name [NAME]. 102 Fourthly, he had already (in mid December 2005) told [NAME] that the "bucket of mud" had been sorted out. 103 Faced with these considerations, counsel for the plaintiff accepted that it was improbable that [NAME] had intended to convey what [NAME] says he took from what [NAME] said on 20 January 2006 about who was to be the contracting party. 104 Ultimately, the position adopted by the plaintiff was that [NAME] did not mean to convey what [NAME] took, but that [NAME] used words which, objectively viewed, had the meaning that [NAME] was to be the contracting party. 105 In my view, the concession that [NAME] did not have an intention to convey what [NAME] took is an additional reason why I have no actual satisfaction that [NAME] said words with the claimed meaning. I prefer [NAME]'s evidence to that of [NAME]. 106 The plaintiff has failed to establish to the Court's reasonable satisfaction that the conversation which [NAME] asserts took place on 20 January 2006, took place.

INSERTION OF [NAME] THE LICENCE AGREEMENT AND ITS EXECUTION

107 I turn now to the inclusion of the name of [NAME] into the Licence Agreement and execution by [NAME] purportedly on its behalf. 108 It was put on behalf of the plaintiff that as a result of a chain of errors on the defendants' side of the record the wrong name of the proposed licensing party was inserted into the Licence Agreement, reinforcing the misrepresentation that [NAME] was the contracting party, and that this was followed through by [NAME]'s and [NAME]'s execution. 109 I have already found that the plaintiff has failed to establish the earlier alleged misrepresentation. There was accordingly nothing to reinforce. 110 So far as inclusion of the name (and ACN number) on the document is concerned, how that came about when, at the time it was under voluntary administration and [NAME] were no longer directors, was not revealed by the evidence. 111 The origin of the error seems most likely to have been the email from [NAME] to [NAME] on 30 January 2006. How Ms [NAME] came to do what she did was not revealed. 112 [NAME] himself gave evidence that as he put it, "Potentially I think – I thought, correctly or incorrectly, that [COMPANY] had been placed in administration and that a company by the same name had been formed with the same ACN number. I don't know whether that's right or it's wrong, but I suspect that that's what it was". 113 [NAME] was aware that the original company had been placed in administration.

114 The defendants' response to the plaintiff's submission that there had been a misrepresentation which was later reinforced, was that the insertion of [NAME]'s name in the document was a misnomer and that the real contracting party was [NAME].

115 The defendants pointed to a number of "objective factors" requiring this conclusion, including that the commercial purpose of the transaction was to licence use by the plaintiff of a subset of the [NAME] rights and that [NAME] was the only party which could grant that licence. 116 The defendants relied on Macmillan v Mumby & Another [2006] NSWCA 74 as authority for the proposition that the true parties to a written contract are those whom the signatories objectively intend to be the parties irrespective of how the parties are described on the document. 117 [NAME] concerned execution of a contractual document by a person on behalf of a non-existent company. 118 The usual rule is that when a person signs on behalf of a non-existent other person, the signatory is personally liable on the contract. 119 The facts of the case were that a document purporting to be a loan agreement was signed. The [NAME] represented the borrower as a particular entity and themselves as directors of it. However, the name of their company and the actual borrower was different. The lenders sought to argue that the loan contract was with the individuals personally because the entity represented to be the borrower did not exist. At [38] Tobias JA said, "In the present case, as I have already observed, the respondents did not purport to contract on behalf of a non-existent company (A.R. Appliance Sales & Rentals Pty Limited) insofar as they signed the receipt referred to in [14] above as directors and, therefore, only as an agent rather than as the real principals. It being the objective intention of both parties that any contract for loan would be between the appellant and the company who carried on the relevant business, no room exists to support a finding that merely because A.R. Appliance Sales & Rentals Pty Limited was non-existent company, the parties intended that the contract of loan would be between the appellant and the respondents personally." 120 The case is authority for the proposition that the rule that the signatory is personally liable is not an irrefrangible one. It yields when the objective intention of the parties is that an existing entity is to be a party notwithstanding that the parties sign a document which on its face identifies a non-existent entity as a party.

121 It may be the case that in such circumstances, namely where parties objectively intend a particular entity to be a party, that that entity in fact is bound as a party (assuming a person executing can bind it), but the case does not stand for that proposition, and no authority directly supporting it was cited. 122 Either way, it seems to me that the true substance of the defendants' submission was that the defendants' conduct was not misleading or deceptive because it was not capable of misleading the plaintiff because [NAME] (on behalf of the plaintiff) intended that the plaintiff contract with the entity which had the [NAME] rights and which could sub-licence the plaintiff to exercise some of those rights, namely [NAME].

123 This proposition was separately articulated as a lack of reliance by the plaintiff on the basis, even if there had been a misrepresentation, the plaintiff would nevertheless have proceeded to contract with [NAME] had the error been detected. This was on the assumption that the plaintiff had in fact not contracted with [NAME] anyway. 124 [NAME]'s affidavit evidence (which was by way of one affidavit sworn on 2 June 2008) was at no time did [NAME] or his associates ever bring to the attention of the plaintiff's directors that there was a possibility that the plaintiff had contracted with anyone other than [NAME] and [NAME] with respect to the Licence Agreement. 125 In his affidavit he did not give evidence as to why it may have been material to the plaintiff to contract with [NAME] as opposed to [NAME]. He also did not give evidence in his affidavit to the effect that he would not have proceeded with [NAME] rather than [NAME]. 126 Although he gave oral evidence under cross examination that he really did not want to deal with [NAME] because it had a number of other commercial interests, I do not accept his evidence that this was his state of mind because: a from as early as 14 December 2005 he was asserting a belief that agreement had been reached on all the key points with [NAME] and that he wished to bring the matter to a formal contractual conclusion; b he prepared deeds of agreement reflecting [NAME] as the counter party; and c draft deeds which he prepared, dated 19 December 2005, 23 December 2005, and 12 January 2006 each reflected a consciousness that [NAME] had the [NAME] rights and provided that [NAME]'s rights would be co-terminus with the "[NAME] concession contract with [NAME]. 127 It was put to [NAME] during cross examination that as at 14 December he was contemplating dealing with [NAME]. He declined to accept this. 128 It was also put to him that he wanted to deal with whichever company [NAME] could proffer would give the [NAME] rights. He also declined to accept this proposition responding that "We had two options at the time that I recall. We had two options. One was to work inside [NAME] through [NAME], as we understood it. The other was to ignore the [NAME] business and go straight to market and not do the work through [NAME]." 129 When faced with the fact that his email correspondence was addressed to [NAME] as a director of [NAME], his evidence was that he thought he was dealing with [NAME] on a temporary basis for probably a 4-6 week period. His evidence was that he put [NAME] "in there because I was advised that they would be acting temporarily until they sorted out the Hair and Beaute" and that [NAME] had said that "we would be dealing with [COMPANY] until he had cleaned up the [NAME] bucket of mud which included the [NAME] shareholders which he didn't particularly want to have in that entity". 130 As at 14 December 2005 [NAME] was clearly contemplating dealing with [NAME]. There is no suggestion in any contemporaneous material of dealing with any entity other than [NAME]. He had been told by then that [NAME] was to be the party and documentation which he brought into existence around that time reflects an intention that the plaintiff contract with [NAME]. 131 I accordingly do not accept his evidence that he was not contemplating dealing with [NAME]. 132 Moreover, in my view he knew that [NAME] did not have the [NAME] rights because they had been transferred to [NAME]. 133 The draft deed of agreement which he prepared dated 23 December 2005 records that on 12 December 2005 the [NAME] rights were "transferred from [NAME] to [NAME]". 134 His letter to [NAME] on 5 April 2006 reflected an understanding that "[NAME]" (clearly [NAME]) had been liquidated and that he was dealing with another entity. 135 Further, on 11 November in 2006 he transmitted to [NAME] the draft agreement to manage, licence and acquire which recorded in its preamble that [NAME] had the [NAME] rights and that [NAME] had agreed to enter into a commercial arrangement with [NAME] to licence [NAME] to use the [NAME] brand, name and image within the DJ's retail stores. 136 In addition it is clear from [NAME]'s correspondence in 2006 that offers were being made to [NAME] and that he used the terms [NAME], and [NAME] with a degree of looseness and interchangeability. It is also clear that [NAME]'s understanding at that time was that the plaintiff's agreement was with [NAME]. 137 I also do not accept [NAME]'s evidence that he considered he was dealing with [NAME] only temporarily because: a there was no suggestion in his affidavit evidence or in any contemporaneous material of any understanding that he was dealing with [NAME] temporarily; b nothing in any of the conversations he recounted with [NAME] (even on his own version) conveyed any such imputation; and c there is no rational reason why [NAME] would have conveyed that [NAME]'s involvement was to be temporary only. 138 On behalf of the plaintiff it was submitted that it should be inferred from the conduct of the plaintiff in 2006 when it requested information for the due diligence process it was undertaking in contemplation of the possible purchase of the entire beauty salon operation, that had it been given the Asset Sale and Purchase Agreement and Novation Deed entered into on 12 December 2005 the plaintiff would have been put "on strong notice" that the Asset Sale and Purchase Agreement was not an arm's length one, may have been attacked by liquidators and rescinded, returning the real assets back to [NAME] so that any agreement with [NAME] would have been worthless. 139 This submission is unsustainable. In 2005 and up to the time the Licence Agreement was entered into the plaintiff never called for those documents. There was no evidence from which the court could draw any inference that any of the earlier transactions were in any way impeachable and the objective behaviour of the plaintiff does not support any such inference. 140 Finally, I do not accept [NAME]'s evidence that he considered there were still two options at the time.

141 [NAME] saw the [NAME] stores, as he put in his affidavit, as "ideal for an initial rollout of [NAME] businesses operating within a prestigious retail chain known Australia wide." By the time of the Licence Agreement, on any realistic view, the plaintiff was commercially committed to using the [NAME] outlets as the vehicle for its proposed rollout. 142 In my view [NAME] intended that the plaintiff contract with the entity which had and was able to convey the [NAME] rights and that he thought that the company described on the Licence Agreement was that entity. 143 By the time of the Licence Agreement he had not even asked for or sighted the Retail Brand Management Agreement or any instrument conferring the [NAME] rights. He only asked for it in the context of the subsequent proposed due diligence process in 2006. 144 It was critical for the plaintiff to obtain part of the [NAME] rights. [NAME]'s draft agreements of 19 December 2005 and 23 December 2005 contemplated that the term of the agreement would be co-terminus with [NAME]'s concession contract with [NAME]. Clause 3.1 of the Licence Agreement has the same contemplation. 145 So far as [NAME]'s execution of the Licence Agreement is concerned, no logical or rational reason, other than a mistake on their part, emerged for why they would have signed on behalf of [NAME]. 146 The plaintiff ultimately accepted that [NAME] made an unconscious error in executing the document in the form they did, because, clearly (as was revealed during cross examination) both of them were aware that they had no power to commit [NAME] to the Licence Agreement. 147 It was put to each of them that they refrained from drawing the error to [NAME]'s attention and they accepted, of course, that this was the case. 148 Clearly so far as they were concerned the Licence Agreement was intended to convey to the plaintiff that part of the [NAME] rights that would enable the plaintiff to operate the [NAME] businesses. 149 I am satisfied that each of them intended to execute an agreement on behalf of the entity that had and was to convey those rights, namely [NAME]. 150 In my view [NAME] and [NAME] on behalf of the plaintiff all contemplated that the party, whatever its name, which held the [NAME] rights was to be the party to the agreement.

151 It follows that the conduct complained of neither misled nor was capable of misleading the plaintiff in any relevant way. 152 In my view the plaintiff has failed to establish that there was any conduct on the part of [NAME] or [NAME] that was misleading or deceptive or likely to mislead or deceive within the meaning of s 42 of the Act. 153 The plaintiff's claim accordingly fails. 154 I will nevertheless deal with the question of whether the plaintiff suffered loss or damage by the conduct complained of even if it was misleading or deceptive. Damages 155 The plaintiff has the onus of establishing that by the conduct complained of it suffered loss or damage. 156 In this case the plaintiff articulates its loss as the monetary value of commitments which it says it undertook in operating the businesses, and which but for entering into the licence agreement it would not have undertaken. 157 The particular amounts are the outstanding liabilities of $422,310.48 of the [COMPANY] to various financiers in respect of finance rental agreements entered into to obtain the [NAME] machines which were used in the plaintiff's business and monthly amounts of $16,500 (including GST) charged by the [COMPANY] to the plaintiff reflected in end of the month monthly invoices commencing on 28 February 2006 and ending on 30 November 2006 (totalling $165,000) for "Contracted Business Services" described as "Business Management & Development; Office Administration, Facilities Rental (Space, Power, Furniture and Equipment, Communications) Telephone, Fax and Internet Lines and Computer Equipment". 158 The fundamental difficulty with this claim, is that the losses claimed cannot be said to flow directly from the conduct complained of, namely the alleged inducement to contract with [NAME]. 159 In his own affidavit, [NAME] described these amounts as "losses incurred by [NAME] from not being paid the [NAME] sales revenue under the contract with [NAME]…" (meaning [NAME]). 160 The alleged losses flow from the manner in which the plaintiff chose to conduct the business over the period that it did, and did so unhindered from the beginning of 2006 until 19 August 2006 when the plaintiff stopped operating. 161 In [COMPANY] v [COMPANY] at [43] the Full Federal Court, Burchett, Kiefel and Hely JJ said: "It is not enough to show, in order to recover losses subsequent to purchase, that the transaction of purchase was induced by the representation, and that the losses would not have occurred but for the transaction: Netaf Pty Ltd v Bikane Pty Ltd (1990) 26 FCR 305, 308; Kenny & Good Pty Ltd v MGICA (1992) Ltd (1997) 77 FCR 307, 328, 330; appeal dismissed [1999] HCA 25. The appellant's submissions proceeded on the erroneous basis that it was sufficient to show that the contract resulted from the inducement. What has to be shown is that the loss flows directly from the inducement. The appellants failed to establish this fact." 162 The plaintiff was not disturbed in its occupation of the [NAME] beauty salons by [NAME] or anyone else during that period. 163 The plaintiff has failed to show that the loss it says it suffered flows directly from the inducement.

164 There are further difficulties. 165 There was no evidence as to the value of the finance rental agreements on 19 August 2006 (or at any other time). Self evidently (and nothing to the contrary was put on behalf of the plaintiff) the outstanding liability on each lease does not equate to the value of the rights under it.

166 There was no evidence that established any contractual liability on the part of the plaintiff to pay the [COMPANY] for the invoiced "Contracted Business Services". Moreover from 19 August 2006 the plaintiff was not operating the businesses. The evidence did not satisfy me that contracted business services were provided by [COMPANY] to [NAME] as described in the invoices beyond that date. 167 The plaintiff has failed to establish that it suffered any loss by the conduct complained of. [NAME] 168 In my view [NAME] were oblivious of the fact that the contracting party reflected on the Licence Agreement was [NAME] when they executed it. 169 It follows that they did not have knowledge of an essential element of the alleged contravention. 170 It further follows, insofar that they were there on behalf of [NAME], that it did not have knowledge of an essential element of the alleged contravention and [NAME] was in the circumstances not a person knowingly involved in the alleged contravention.

171 In my view the plaintiff has failed to establish that it suffered any loss by the conduct complained of. CONCLUSION 172 The plaintiff's claim is dismissed with costs. 173 The exhibits are to be returned. **********

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