Cannavan v Lettvale Pty Ltd (t/a Good Vibrations Adult World) [2003] QDC 156

DISTRICT COURT OF QUEENSLAND CITATION: Cannavan v. Lettvale Pty Ltd [2003] QDC 156 PARTIES: DAVID PATRICK CANNAVAN (appellant) v LETTVALE PTY LTD (trading as GOOD VIBRATIONS ADULT WORLD) (respondent) FILE NO/S: D4350 of 2002 PROCEEDING: Appeal ORIGINATING COURT: Magistrates Court Brisbane DELIVERED ON: 27th June 2003 DELIVERED AT: Brisbane HEARING DATE: 13th May 2003 JUDGE: Healy DCJ ORDER: Appeal upheld: Respondent company convicted of selling objectionable films and prohibited publications. Convictions recorded. Lettvale Pty. Ltd fined in the sum of $24,750 and to pay costs in the sum of $2,100 such sums to be paid to Deputy Registrar of District Court Brisbane within six months - if not paid within that period levy in distress. CATCHWORDS: PROOF OF CULPABILITY : SALE OF PROHIBITED FILMS AND MAGAZINES AUTHORITY TO SPEAK – IDENTIFICATION OF DEFENDANT COMPANY – SUFFICIENCY OF EVIDENCE VALIDITY OF STATE LEGISLATION HumanRights (SexualConduct) Act1994Cth Queensland Classification of Films Act 1991 Queensland Classification of Publications Act 1991 COUNSEL: Mr R V Hanson QC with Mr. K Sowden for Appellant/Prosecutor Mr A J Morris QC with Mr C Jennings for Respondent/Defendant SOLICITORS: Mr C W Lohe, Crown Solicitor for Appellant/Prosecutor Mr. C. Nyst, Nyst Lawyers for Respondent /Defendant -- 1 of 14 -- 2 The Appeal [1] The respondent company was prosecuted in the Magistrates Court at Holland Park for one count of selling pornographic films and one count of selling pornographic literature. [2] The Magistrate dismissed both charges on the grounds that he was not prepared to find that the defendant company was responsible for the sales – see p.12 of the Reasons. [3] The appellant appeals against the whole of the decision of the learned Magistrate delivered at the Holland Park Magistrates Court on 2 October 2002 by which it was ordered that the charges against the respondent be dismissed and that the appellant pay the respondent costs of $3,125. [4] The appeal is on the grounds that: 1. The Magistrate erred in law and in fact in refusing to infer that the person Michael McGregor spoken to by the witness Elridge was authorised to speak on behalf of the defendant company. 2. The Magistrate engaged in impermissible speculation in having regard to the fact that there was no voice identification, no evidence as to who else had access to the telephone number, and no evidence as to whether another family member had the same name. 3. The Magistrate gave no, or no sufficient weight to the circumstances indicating that Mr. McGregor was authorised to speak on behalf of the defendant, viz, -- 2 of 14 -- 3 (i) Mr. Elridge, on asking to be referred to someone who could speak for the company, was referred to Mr. McGregor; (ii) Mr. McGregor bore the same name as the sole director and secretary of the company, and the same name as one of the guarantors of the lessee’s obligations; (iii) Mr. Elridge identified himself and the nature of his inquiry; (iv) Mr. McGregor spoke with apparent knowledge of the business; (v) Mr. McGregor agreed to attend for an interview; 4. The Magistrate failed to have regard to the fact that the defendant did not suggest and did not prove that Mr. McGregor was not authorised to speak on behalf of the defendant. [5] The Notice of Appeal then goes on to allege that the Magistrate failed to give any, or any sufficient weight to what was essentially a circumstantial case against the respondent company. The Facts [6] The following factual circumstances were not in issue before the Magistrate. [7] On 22 February 2001 the investigating inspector purchased two videos at Shop 6, 2120 Logan Road, Mt. Gravatt. It was a shop dealing in adult “goods” (see T.9). [8] On 23 February 2001 the investigating inspector returned and purchased three magazines (transcript of trial is incomplete – see T.11-12). -- 3 of 14 -- 4 [9] The investigating inspector collected a business card from the premises – T12 – which contained the name “Ádult World” (Exhibit 9). The complaint which was before the Magistrate was amended in a number of respects. The first charge on the complaint was for selling objectionable films under the Queensland Classification of Films Act, the second for selling objectionable or prohibited magazines under the Queensland Classification of Publications Act. [10] The particulars before the Magistrate of the way the magazines and films purchased by the investigating inspector were classified under the State and Commonwealth legislation were not in issue.. [11] In essence, the respondent company was charged with selling what is commonly called pornographic material. [12] In order to prove the defendant company responsible for the sales, the prosecution relied on the following: (a) the lease of the shop (Exhibit 3) showed the respondent company as the lessee of the shop; (b) permitted use under the lease was “retail adult lingerie and adult products” (see lease summary); (c) the business card for the shop (Exhibit 9) included the name “Adult World” – a name adopted by the respondent company upon a name change on 10 April 2002 (see Exhibit 2); (d) a person apparently authorised to speak for the company admitted that the respondent company operated the business at the shop. -- 4 of 14 -- 5 [13] The learned Magistrate: 1. was not persuaded by (a), (b) and (c) above – see Decision p. 8-12; 2. rejected the evidence referred to in (d) above because he did not accept that the person had authority to speak on behalf of the company – see Decision p. 7. Findings of Fact Sought [14] The appellant seeks a finding of fact that the respondent company was responsible for the sales of the books and films. [15] The appellant submits that: (a) there was ample evidence to establish that the person who admitted that the respondent company conducted business at the premises was authorised to speak for the company; (b) the evidence other than the admission independently proved that the respondent company conducted the business. The Admission [16] Mr. Elridge, the investigating inspector, asked the shop assistant at “Good Vibrations Adult World”, the shop from which he had purchased the magazines and the film whether he was authorised to speak on behalf of the company. The shop assistant said that he was not, so Mr. Elridge asked who he could speak to and the -- 5 of 14 -- 6 shop assistant supplied Mr Elridge with a name and telephone numbers which he subsequently rang when he returned to his office. (t.15, lines 20-26). [17] Mr. Elridge phoned one of the numbers supplied to him by the shop assistant and spoke to a Michael McGregor. McGregor told him that the business was owned by Lettvale Pty Ltd. Mr. Elridge discussed with McGregor the fact that he had previously purchased two videos and three magazines from Shop 6, 2120 Logan Road Upper Mt Gravatt. Mr. Elridge also informed McGregor who he was, and McGregor agreed to attend for an interview (t.15 lines 32-48). [18] The prosecution relied on the admission made by Michael McGregor that the business was owned by Lettvale Pty Ltd. [19] The only question on this aspect of the prosecution’s circumstantial case was whether Michael McGregor was authorised to bind the respondent company. [20] In ruling on this point, the Magistrate said this: “I indicate I believe there was insufficient identification of the person at the other end of the phone as to what Michael McGregor was and whether he was, in fact, the Michael McGregor connected with Lettvale Pty Ltd. Although he does make some reference to that company, there is no indication that he was the Michael McGregor. Who knows? Perhaps there was a son Michael McGregor also at that place. I do not know. And certainly, so far as the name of the defendant where this charge is concerned, I believe that to be hearsay without further identification. I will exclude that evidence of the conversation”. (T.17 line 25). [21] Authority to speak for a company may be inferred from the circumstances; Edwards v. Brookes (Milk) Ltd (1963) 3 All ER 62; ACCC v. World Net Safe (unreported – judgment of Spender J in Federal Court on 30 April 2002); Walplan v. Wallace (1985) 8 FCR 27 and cases there cited. -- 6 of 14 -- 7 [22] The principle that emerges from these cases is that when someone says that he is authorised to speak on behalf of a company that admission is not to be dismissed as hearsay out of hand. It might be hearsay but it is certainly original evidence of a person saying that he is authorised to speak on behalf of a company and if that admission is supported by other circumstances, evidence of other circumstances, the admission can be taken into account in deciding whether having regard to all the circumstances the person who is speaking is authorised to speak on behalf of the company. [23] The authorities cited above indicate that the following are among the circumstances from which authority may be inferred: (i) a government official investigating a breach of the law, on seeking a person in authority, is referred to a person who makes the admission; (ii) that person says he is the manager, or otherwise indicates or appears to be a person in a position of authority; (iii) that person appears to speak with knowledge of the company’s affairs; (iv) the inference may be more readily drawn where the company, at the hearing, offers no challenge by way of cross examination or evidence to the suggestion that the speaker has authority to speak for the company. [24] Each of those factors was present in this case. -- 7 of 14 -- 8 [25] The investigating inspector asked at the shop to be referred to someone who could speak for the company T15 ll 20-30. [26] He telephoned the number he was given and spoke to a person giving the name he was given – T 15 l 30 and T 12 l 45. [27] He identified himself and explained he was investigating the sale of videos and magazines from the address where he had made the purchases – T 15 ll 40-46. [28] The person he was speaking to bore the same name as the sole director and secretary of the company – Exhibit 2; and the same name as one of the two guarantors of the company’s obligations under the lease – see Exhibit 3. [29] The speaker apparently spoke with knowledge of the business – T 15 l 35 – T 16 l 20. [30] The speaker agreed to attend for an interview – T 15 l 50. [31] The respondent company made no challenge to the suggestion that the speaker was authorised to speak for the company by calling evidence to the contrary – Edwards v Brooks (Milk) Ltd at 65B; Walpin at 34; TTS Pty Ltd v Griffiths (1991) 105 FLR 255 at 262; Australian Safeway Stores Pty Ltd v Gorman (1973) VR 570 at 580- 581; citing R v Guiren (1962) 79 WN (NSW) 811. The authorities and the circumstances I have discussed lead to a finding that the speaker Mr MacGregor was authorised to bind the respondent company. -- 8 of 14 -- 9 [32] Apart from the evidence from which I am satisfied it should be inferred that Mr MacGregor was authorised to bind the respondent company the Crown relies on a circumstantial case which in my view leads inexorably to the conclusion that the respondent company was responsible for the sales of the pornographic magazines and films. [33] The undisputed facts relied on by the prosecution to establish its case against the respondent company were that -: (i) the respondent company was the lessee of the shop – see Lease Exhibit 3; (ii) the permitted use of the premises under the tenancy was the conduct of the very type of business being conducted there – see Lease Summary; (iii) a business name in use at the premises (Adult World) – see the business card Exhibit 9) corresponded with the name to which the defendant changed its name – see Exhibit 2; (iv) clause 5.02 of the lease prohibited a sub letting without the written consent of the lessor; (v) there was no suggestion either by cross examination of the lessor’s letting agent, Burke, or by leading evidence, that there had been a sub letting. [34] As to (iii) above, a correspondence between a business name in use at the premises and the defendant’s name can be some evidence that the defendant occupies the premises – Australian Safeway Stores at 579. -- 9 of 14 -- 10 [35] In this case the standard of proof was that of beyond reasonable doubt. The onus of proof of the guilt of the respondent company was at all times on the prosecution and never shifted to the respondent company. The learned Magistrate had to decide whether on the evidence before him he could be satisfied beyond reasonable doubt that the guilt of the respondent company was not only a rational inference but also the only rational inference that could be drawn from the circumstances. In my opinion he was not entitled to speculate as to whether or not there might have been a sub lease. There was no evidence before him that the subject premises had been sublet. [36] I am satisfied that the learned Magistrate erred in deciding that the circumstantial case presented by the prosecution was not sufficiently strong to warrant his convicting the respondent company. [37] On considering the evidence adduced by the prosecution before the Magistrate I am satisfied beyond reasonable doubt that the guilt of the respondent company is the only rational inference that could be drawn from the circumstances which were before the learned Magistrate. [38] Mr Morris QC for the respondent company submits that if I were to reach the view that an appellable error was disclosed in the way the case was determined by the learned Magistrate his decision can be upheld on constitutional grounds. [39] It was contended that the Queensland legislation under which the respondent was prosecuted, adopts provisions contained in an enactment of the Commonwealth Parliament which is ultra vires. The Classifications (Publications, Films, and Computer Games Act 1995 (Commonwealth) provides, by S.3, that it is: -- 10 of 14 -- 11 “... intended to form part of a Commonwealth/State/Territories Scheme for the classification of publications, films and computer games and for the enforcement of those classifications.” [40] This Act, it is submitted, does not constitute an exercise of any relevant “head” of legislative power deriving from S.51 of The Constitution. [41] It is submitted that the same Act contravenes s 99 of The Constitution, because the classification system is applied with different consequences in different Australian States. That this is impermissible is demonstrated by the decisions of the High Court of Australian in James v The Commonwealth (1928) 41 CLR 442 and Elliott v The Commonwealth (1936) 54 CLR 657. [42] It is further submitted that more fundamentally, the provisions of the Queensland legislation under which the Respondent was prosecuted are invalid by operation of s 109 of The Constitution, because they are inconsistent with the provisions of the Human Rights (Sexual Conduct) Act 1994 (Commonwealth);that on the evidence before the Magistrate it is clear that the Queensland Acts interfere, in an entirely arbitrary fashion, with the sexual conduct of consenting adults in private. [43] It was submitted that if I came to the view that the Magistrate ought to have found beyond reasonable doubt that the respondent had committed the offence charged under Queensland law I should hold that the Magistrate was nonetheless correct in law in dismissing the charge on the ground that the charges were based on legislative provisions that are constitutionally invalid. [44] In relation to the submission that the Queensland legislation adopts a Commonwealth enactment that is invalid as having no “head” of legislative power -- 11 of 14 -- 12 derived from s 51 of The Constitution Mr Hanson QC submits, I think correctly, that there are two errors in this reasoning: (a) The Commonwealth Act is valid under s 122 of The Constitution; (b) Even if the Commonwealth Act were invalid, it does not follow that the State Act is invalid. [45] As to (a) – The Commonwealth Act, by its terms, applies to the Australian Capital Territory only – s 3. Even though the Australian Capital Territory is partly self governing, it has no power to legislate with respect to “the classification of materials for the purposes of censorship” – see Australian Capital Territory (Self Government) Act 1988, s 23 (1)(g). Here clearly the Commonwealth is exercising its power under s 122 to enact legislation for the Territories. No question of power under s 51 arises. [46] As to (b) above – even if the Commonwealth Act were invalid, that would not necessarily result in invalidity of the Queensland Act. If validity of the Commonwealth Act were an indispensable condition for the operation of the Queensland Act, that may be so. But adoption by the Queensland Act of a standard prescribed under a Commonwealth Act does not mean that validity of the Queensland Act depends upon validity of the Commonwealth Act under which the chosen standard was prescribed. [47] Mr Hanson QC made submissions on the validity of the Commonwealth Legislation – s 99 which I believe are correct. -- 12 of 14 -- 13 [48] If the classification system applies with different consequences in different States, that is not the result of the Commonwealth Act. It is a result of the various States implementing their own individual censorship regimes by their own legislation. [49] I am satisfied that s 99 has no application. [50] On the question of validity of the Queensland Acts – s 109 of The Commonwealth Constitution - I am of the view that the Commonwealth’s Human Rights (Sexual Conduct) Acts 1994 has no application to the State Acts under consideration and that the Queensland legislation is not invalidated by s 109 of The Constitution. It seems to me that Mr Hanson is correct in arguing that – (a) the Commonwealth Act applies only to sexual conduct; the State Acts deal with the sale of goods not sexual conduct; the Commonwealth and State Acts deal with different topics; there is no inconsistency; (b) if the word “conduct” is thought to be ambiguous, so that reference to the explanatory memorandum is permissible, clause 5 of that memorandum shows that “sexual conduct” does not mean distribution of pornographic material; the Commonwealth Act does not conflict with the State Acts; (c) if the State Act does fall within the meaning of s 4 of the Commonwealth Act, it is only invalid if its operation is an arbitrary interference with privacy as defined in s 4; there is nothing arbitrary about the way the Queensland legislation operates; any differences in censorship standards between Queensland and other States is the result of the adoption of different standards by different States; having standards in Queensland -- 13 of 14 -- 14 which differ from those in other States does not demonstrate an arbitrary interference with privacy. [51] I rule that the relevant Queensland legislation is not invalid as having no “head” of legislative power derived from s 51 of The Constitution; that s 99 of The Constitution has no application to the relevant Queensland legislation; that the Queensland legislation is not inconsistent with the Commonwealth’s Human Rights (Sexual Conduct) Act 1994. [52] I convict the respondent company of the charge that under s 39 of the Classifications of Films Act on the 22 nd day of February 2001 at Upper Mt Gravatt in the Holland Park Division of the Brisbane Magistrates Court District in the State of Queensland the Adult World Pty Ltd then known as Lettvale Pty Ltd trading as “Good Vibrations Adult World” did sell objectionable films. [53] I convict the respondent company of the charge that under s 12 of the Classification of Publications Act 1991 on the 23 rd day of February 2001 at Upper Mt Gravatt in the Holland Park Division of the Brisbane Magistrates Court District in the State of Queensland, Adult World Pty Ltd, then known as Lettvale Pty Ltd, trading as Good Vibrations Adult World did sell prohibited publications. . -- 14 of 14 --