Lee v Evans
112 CLR 276(Decision by: Windeyer J)
Lee v Evans
Court:
Judges:
Barwick CJ
Kitto J
Taylor J
Windeyer JOwen J
Subject References:
Corporations
Business names
Prohibition of use in invitation to public to lend money
Legislative References:
Registration of Business Names Act 1928 (SA) - Section 4a
Judgment date: 5 November 1964
SYDNEY
Decision by:
Windeyer J
The substantial question on which this appeal turns is whether what the appellant did amounted to an "invitation to the public" to deposit money with or lend money to Chowilla Timber Supply Co "Chowilla Timber Supply Co " was merely the registered business name of the appellant. That the appellant had approached a large number of people and collected a considerable sum of money from them is beyond doubt. But at his trial attention became very largely concentrated on his transactions with the two Broadbents. The magistrate, in a careful survey of the evidence as a whole, said of the testimony of the Broadbents that "there is a certain amount of confusion evident as to just what was said. ... I can well understand this as it seems that Chowilla Sawmills was also brought into the conversation". Cross-examination of these witnesses had been largely directed to establishing that the invitation to them was not to invest in Chowilla Timber Supply Co but in Chowilla Sawmills: that was the name in which one Galpin carried on a sawmilling business until July 1963 when the appellant became registered in place of Galpin as carrying on that business also. As I read the magistrate's findings, he thought that the mention of both names had caused some confusion. But his conclusion was quite definite. He said: "I think that the defendant's statements to Constable Thompson show conclusively that, although the witnesses mentioned the references which were made by him to Chowilla Sawmills as well as Chowilla Timber Supply Company, the defendant's real purpose was to get them to invest in Chowilla Timber Supply Company and that he invited both of the Broadbents and Mr. and Mrs. Tuckwell to invest in the Chowilla Timber Supply Company of which he was in fact the sole proprietor". This finding was in my opinion justified by the evidence. Neither in the Supreme Court nor in the notice of appeal to this Court was any point taken that the invitation to invest was not an invitation to deposit money.
What is said is that there was no invitation to the public to do so. The magistrate found that the invitations the appellant issued to the Broadbents and the Tuckwells were invitations to deposit money with his "company". If the evidence showed that the invitations to those persons occurred in the course of and as incidents in the appellant's canvassing members of the public generally with similar invitations then in my opinion it would support the charge. However the magistrate, I think, was led into a mistake as to the issue he had to decide. The prosecution gave, and then amended, particulars of the charge, with the result that it was alleged that the invitation to the public was "oral and made to Oliver Claud Broadbent and John Noel Broadbent on 12th August 1963". With the particulars in that form-and it was the form the prosecution chose-the magistrate was not unnaturally led to the view that, as he put it: "The question is whether the oral invitation to Oliver Claud Broadbent and John Noel Broadbent at Whyalla on 12th August 1963 was an invitation to the public, which it must have been before there can be a conviction". It was, however, misleading to formulate the question in that way. An invitation to a particular individual cannot, it seems to me, ever be of itself and without more an invitation to the public; but an approach to an individual may occur in the course of an invitation general in character.
An invitation can be conveyed or communicated to the public in many ways: in writing, by a notice in the press or posted in a public place conveying an invitation to any reader: orally, by an address to a public meeting or an announcement in a public place: by handing leaflets to passers-by in a public street: by circulars sent through the post: by going indiscriminately from house to house repeating the invitation. The essence of an invitation to the public is not in the manner of its communication or in the number of the persons to whom it is communicated. The criteria are rather, are the recipients of the invitation persons chosen at random, members that is of the general public, the public at large, all and sundry: or are they a select group to whom and to whom alone the invitation is addressed, so that if an outsider sought to respond to it he would be told that he was not one of those invited to come in. We were referred to decisions under the Companies Acts concerning the issue of prospectuses offering shares or debentures to the public. The question there is whether a prospectus, which is by definition intended for the public, has been issued as such. For present purposes the cases show only that the question is one of fact and degree. Their effect is summed up, correctly I think, in Palmer's Company Precedents, 16th ed. (1951) Pt 1, p. 10, where it is said: "The test seems to be this-is there a sufficiently intimate subsisting connection between the company or the person making the offer and the persons to whom the offer is made as friends, customers, or otherwise to make the offer a domestic concern. And it is apprehended that the mere fact that an offer is made by circular addressed by name to a number of persons does not of itself take it out of the category of offers to the public".
That there was an invitation to the public may be proved by proving an invitation to one person, selected to receive it simply because it was thought he might respond to it, and that substantially similar invitations had been made or were to be made to sundry other persons, members in the same sense of the general public. In my opinion there was evidence of that in this case The appellant admitted that he had been canvassing people to raise money for his "company". The Broadbents gave evidence that he said that he was approaching other people and that if enough people responded by putting in money the company would seek registration on the stock exchange. The magistrate did not convict the appellant because, having formulated the question for himself in the way he did, he was persuaded that certain dicta of Jordan C.J. in Ex parte Lovell; Re Buckley [F26] were in point. In that case the learned Chief Justice of New South Wales was considering a prohibition of share-hawking, that is to say of going "from house to house or from place to place offering shares for subscription to the public or any member of the public". In the course of his judgment he referred to the meaning that in the prospectus cases had been put on the phrase "offer to the public". And he went on to point out that in the prohibition of sharehawking the words were "the public or any member of the public", wider words than "the public", which was the phrase in the prospectus cases. He said: "It is to be noted that the section is not restricted to offers to the public. In the case of provisions which are so restricted, an offer to the public prima facie connotes an offer of the Carlill v Carbolic Smoke Ball Co [F27] type, namely one made to the public generally and capable therefore of being acted upon by any member of the public" [F28] . But to apply that remark in the way counsel sought to do here is, I consider, a mistake.
The denotation of the phrase "any member of the public" was, it had been argued, restricted by its association with the phrase "the public". It was in the course of dispelling that proposition that Jordan C.J. spoke of the prima facie meaning of the words "an offer to the public". His reference to the Smoke Ball Case [F29] was by way of illustration only. That case was in a somewhat different field from the present because it concerned an offer acceptance of which by any member of the public would create a binding contract. Such an offer must necessarily be uniform and explicit. But an invitation to the public to deposit money may amount to no more than the soliciting in general terms of offers which may or may not be accepted. It is enough if there be an offer to do business, as distinct from an offer to make a contract. However, the distinction does not make the illustration of a public offer that Jordan C.J. gave inapt here. Whether or not the proposal be an offer or an invitation, it cannot be an offer or an invitation to the public if it be addressed only to a particular person. All that Lovell's Case [F30] decided is that an offer to "a member of the public" does not cease to be so because it is not made to the public at large. That has no direct bearing on the facts of this case.
The question in this appeal is whether the Supreme Court was justified in holding that on the evidence the offence charged was proved. The evidence from which it could be inferred that there was an invitation to the public and that the appellant approached the Broadbents and others in the course of making that invitation was far from full. Nevertheless, without agreeing in all that is said in the judgment of the Supreme Court, I consider that their Honours' conclusion is correct.
The evidence does, I think, justify their statements that "it is obvious that these transactions (scil. the invitations to the Broadbents) were incidents in a campaign to raise money according to a settled plan or system" [F31] : that the only reason the appellant had for approaching the Broadbents was "the possibility that they might be persuaded to lend him money" [F32] : that his doing so was "an incident in the course of a campaign to raise money from the public" [F33] . Those statements are not I think inconsistent with any findings of the magistrate as to the facts. As I read what he said, he dismissed the charge because he was led by the form of the particulars into a misapprehension of the issue.
I would dismiss the appeal.