Australian Ocean Line Pty Ltd v West Australian Newspapers Ltd

[1983] FCA 64

CATCHWORDS

Trade Practlces Act - case stated - misleadmg and

deceptlve conduct - publication of newspaper articles

concerning pleasure cruise - whether publication of

articles within trade and commerce - associated

jurisdiction - actlon for defamation

Trade Practices Act 1974 ss. 6, 52(1), 75B, 82

Federal Court Rules Order 29 r . 2

AUSTRAZIAN OCEAN LINE PTY. LTD. V. 'iYEST AUSTRALIAN

NEWSPAPERS LIMITED and WILLIAM ROSS

HARVEY

NO. WA G1 Of 1983

Toohey J.

Perth

1 9 April 1 9 8 3

IN THE FEDERAL COURT

OF AUSTRALIA )

WESTERN AUSTRALIA ) No. WA G1 of 1983

DISTRICT REGISTRY )

GENERAL DIVISION )

B E T W E E N :

AUSTRALIAN OCEAN LINE PTY . LTD.

Applicant

and

WEST AUSTRALIAN NEWSPAPERS LIMITED

First Respondent

and

WILLIAM ROSS HARVEY

Second Respondent

O R D E R

JUDGE MAKING ORDER : Toohey J.

DATE OF ORDER : 19 April. 1983

WHERE MADE	: Perth
THE COURT ORDERS:

1. The questions of law reserved for the consideration

of the court be answered as follows :

(i) Does the statement of claim disclose any

cause of action or triable issue under s.52

of the Trade Practices Act against the

first respondent?

Answer: Yes

2.

(ii) Was the conduct of the first respondent

complalned of in the statement of claim

engaged in by the first respondent in trade

or commerce within the meanlng of s.52

of the Trade Practlces Act?

Answer: Yes

(iil) Was the conduct of the first respondent

complained of in the statement of claim

capable in law of being mlsleadlng or

deceptlve or llkely to mislead or deceive

wlthln the meaning	of s.52 of the Trade
Practices Act?

Answer: Yes

( lv ) Does the statement of claim disclose any

cause of actlon or triable issue under the respondent?

Answer: Yes

(v) If the statement of claim does not disclose any cause of action or triable issue under

s.52 of the Trade Practlces Act or otherwise

under that Act agalnst the first and

second respondent or either of them, does

this Court have jurlsdiction to hear and

determine the claims of the applicant

3 .

against the respondents under the

defamatlon laws of Western Australia?

Answer: No

(vi)   If the statement of claim does disclose

a cause of action or triable lssue under

s.52 of the Trade Practices Act or

otherwise under that Act against the

first and second respondents, or either

of them, does this court have jurisdictlon

to hear and determine the clams of the

appllcant against the respondents under

the defamation laws of Western Australia?

Answer: Yes

2.	The respondents' notlce	of motion dated	19 January 1983
be dismlssed.

3 . The respondents pay the applicant's costs of the

case stated and	of the motion, to be costs In the
cause.

I N THE FEDERAL COURT )

AUSTRALIA OF 1

WESTERN AUSTRALIA 1 N o . WA G 1 of 1983

DISTRICT REGISTRY 1

GENERAL DIVISION 1

B E T W E E N :

AUSTRALIAN OCEAN LINE PTY. LTD.

Applicant

and

WEST AUSTRALIAN NEWSPAPERS LIMITED

F i r s t Respondent

and

WILLIAM ROSS HARVEY

Second Respondent

CORAM: TOOHEY J.

19 Apri l 1983

REASONS FOR JUDGMENT

On 8 January 1982 the ship Dalmacija r e tu rned t o

Fremantle a t t h e end of a 25 day Christmas holiday cruise.

I n t h e D a i l y N e w s of Fr iday 8 January and Monday

11 January and i n t h e West A u s t r a l i a n of 9 January and

12 January there appeared art icles abou t t he cruise i n

large part , though no t ent l re ly ,cr i t lcal of It. In t h e

main t h e art icles r e p o r t e d t h e comments of passengers,

sometlmes i n dlrect and o ther t imes i n ind l r ec t speech .

L .

As well there was a small amount	of comment by the
authors of the articles.

The appllcant, Australlan Ocean Line Pty. Ltd.,

IS a company Incorporated in Western Australia. It had the Dalmacija under charter at the tlme of the cruise. The first respondent, West Australlan Newspapers Limited,

is a company incorporated in Western Australia and lt is the publisher and proprletor of the Daily News and the West Australian, daily newspapers having afternoon and

morning circulation respectively throughout Western Australia. The second respondent, William Ross Harvey,

is the printer of each of those newspapers.

The applicant has brought proceedings in the

Federal Court, clalming that the publication and prlnting

of the artlcles, more accurately, of those portions

complained of in the statement of claim, constituted

conduct that was misleading and deceptive or alternatively

was likely to mislead or deceive, contrary to s.52 of

the Trade Practices Act 1974. The pleading was also in

terms that amounted to an allegation that the respondents

had defamed the applicant in the course of Its business.

The respondents have conditionally appeared to the

application and statement of claim. The reason for a

condltlonal appearance is not stated in the document itself.

At the same tune they lodged a notlce of motion

3 .

seeking a dismissal of the proceedings. Again, the basls

for thls application does not appear In the document

itself. But the respondents' position, both as to the

appearance and the motion, have I think been sufficlently

made clear in the steps that have been taken since those

documents were flled.

At the suggestlon of the respondents and with the

consent of the applicant a case was stated for the decislon

of thls court,seekmg the determlnatlon of several questions

relating to the jurisdlctlon of the Federal Court to

entertain the causes of action pleaded against the respondents

in the context in which they were pleaded.

Although the case stated is by way of

amplification of the motlon seeking a dismlssal

of the proceedings, it is In truth a case stated and the

matter should be approached accordmgly. By that I mean

that Order 29 r.2 of the Federal Court Rules empowers the

court to make orders for "the statement of a case and the

question for decision". That having been done, it is

incumbent upon the court, assuming the question to be

relevant, to answer it. It would not be appropriate to

approach the matter in precisely the same way as if it were an

application to strlke out a statement of clam as disclosing

no reasonable cause of action. In that case the question

is whether it would be open to the appllcant upon the

pleadings to prove facts at the trial which would constitute

4

a cause of action. Mutual Life & Citizens Insurance CO.

Ltd. v. Evatt (1970) 122 CLR 628 at p.631. On such an

application it may well be approprlate for the court to say

little more than that It is not satisfied that the

applicant cannot succeed, without necessarily expressing

a concluded view on the questions debated before it.

The case stated comprises a number of facts which

the court is asked to assume to be true for the purpose

of answering the questions of law reserved for its

consideration. Annexed to the case stated are the

newspaper articles in question and the statement of claim.

No defence has yet been filed by the respondents.

I propose to set out each question of law for the

determination of the court, conslder the submissions	of
counsel and answer the question.

1. action or trlable issue under s.52 of the Trade Does the statement of claim disclose any cause of The point of this question lles in the respondents'

submission that even if the contents of the newspaper

artlcles complained of can be described as misleading or

deceptive, on no view of the facts pleaded in the statement

of claim can it be said that in any relevant respect the

first respondent engaged in conduct in trade or commerce.

The respondents do not deny that in publishing and

selling the newspapers in which the articles appeared the

5.

first respondent engaged In trade. But, they say, the

trade was that of publlshing and selllng newspapers.

The respondents accept that it 1 s posslble to engage In

misleading or deceptive conduct in that trade, for

Instance by publishlng clrculatlon figures that are

false or by claiming a greater number of pages of classifled

advertlsements than is the case. However, the argument

runs, if the complamt 1 s of a report, the contents of

whxh are said to be inaccurate, the conduct complained

of is not conduct in the trade of publishing and selling

newspapers.

Counsel for the respondents, in developlng that

submission, was drawn into matters that more appropriately arlse under the second questlon asked In the case stated.

It is convenient to deal wlth those matters now.

Counsel argued that s.52 of the Trade Practices Act

fmds its place in Part V - Consumer Protection. Even

though an appllcant relying upon s.52 need not himself be

a consumer, he must polnt to a consumer who has been or

who is llkely to be mislead or deceived by the conduct

in question. In the case of the publication of a

newspaper it is the reader who is the consumer. Those

who buy newspapers are, in any relevant sense, consumers

of newspapers not of sea cruises.

Counsel drew attention to the remarks of Mason J.

in The Queen v. Credit Tribunals; ex parte General Motors

Acceptance Corporation (1976-77) 137 CLR 545 at p.561 :

6.

"Here the settmg ln which s .52 (1)

appears is shown by the headlngs contained in the sub-section emerges as an important general prohlbition against a corporation in the course of trade or commerce engaged in a form of conduct, a trade practice, whlch is unfair".

'Part V - Consumer Protection'

and 'Division 1 - Unfair Practices'.

Counsel sought to draw from this dlctum the

proposition that in s.52 the conduct complained of must be

an unfair trade practice, something incidental to the trade

which in the present case is that of publlshing and selling

newspapers. And, he said, there is no unfair practlce in

the trade of publishing and selling newspapers just because

a report of general interest may prove to be false.

In my view the respondents' submlsslons place too

narrow a construction on the language of s.52(1). The

first respondent published the articles in the course of

carrying on an activity which was undoubtedly commerclal

and which may be falrly described as conduct In trade

or commerce. While It may be true to say that the flrst

respondent's activity 1 s the publishing and selllng of

newspapers, It would be unreal to divorce the paper which

is sold from its contents. The sale of a newspaper 1s a

sale of goods to a consumer. And the buyer is a consume1

not only of the object he buys but, actually or

potentially, of products or services it descrlbes.

If the product or servlce 1s described in terms that

are false, the buyer 1s thereby mislead or deceived or

is likely to be mislead or deceived by what he has read.

And what he has read is part of the conduct of the

publisher in publlshlng and selling the newspaper	In
question.

Whether the applicant makes good its allegatlons, whether

in terms of s .86 of the Act it can show that it is a person who has suffered loss or damage by conduct of the flrst

respondent done in contravention of s.52, of course remains

to be seen. But I am satisfied that the statement of claim

dlscloses a cause of action against the first respondent under

s.52 of the Trade Practices Act. I answer this questlon - yes.

2. Was the conduct of the first respondent complalned of in the statement of claim engaged in by the

first respondent In trade or commerce wlthin the

meaning of s.52 of the Trade Practlces Act?

The respondents approached this question on the basis

that it was only another way of looking at questlon 1. In

that event, for the reasons already given,	I answer this
question - yes.

3 . Was the conduct of the first respondent complained

of in the statement of claim capable in law of being

misleading or deceptive or likely to mislead or decelve

within the meaning of s.52 of the Trade Practices Act?

The respondents' submission that thls question should

be answered no was put in thls way. Conduct is capable In

law of bemg misleading or deceptive or likely to mislead or

8.

deceive if It 1s capable of leading people mto error.

Taking the newspaper articles as a whole, no reasonable

person V70Uld be mislead because the articles would do no

more than cause a reader to be confused or wonder at the

service provided on the Dalmacl~a. Counsel for the

respondents relied upon Parkdale Custom Built Furniture

Pty. Ltd. v. Puxu Pty. Ltd. (1982) 42 ALR 1, In partlcular

the re~ection by the High Court of the notlon that mere

confusion regarding products being offered for sale may amount

to being deceived or mislead.

But the answer to the respondents’ argument is

that para. 13 of the statement of claim pleads that shortly after the publication of the articles,and in consequence of them, persons who had made reservations for later crulses

of the ship cancelled then bookmgs; that travel agents

removed tour brochures from their racks;and that tour

promoters and travel agents became generally reluctant to

promote the tour for fear of being talnted with the adverse

publicity generated by the respondents’ conduct. Again, it

may be that the applicant wlll not make good those allegatlons

at the hearing; that remains to be seen. But the allegations

having been made and having been accepted for the purpose

.

of the case stated, I am quite unable to say that the conduct

of the first respondent was not capable in law of being

misleading or deceptlve. Indeed if it be accepted for the	_ I
purposes of the present exerclse that persons were mlslead,

it is but a short though not inevitable step to conclude

that the articles were “misleading or deceptive or likely to

9 .

mislead or deceive", words descrlbed by Glbbs C.J. In

Parkdale at p.6 as "on any vlew tautologous". I

must answer this question - yes.

4 . Does the statement of claim disclose any cause of actlon or trlable issue under the Trade Practices

- Act against the second respondent?

Counsel for the respondents submltted that s.52(1)

of the Trade Practlces Act is concerned wlth the conduct of

a corporation and that nothing in the statement of claim

pleads facts capable of supporting a cause of actlon agalnst

the second respondent under that Act. Counsel drew

attention to s.6(3) of the Act whereby Dlvision 1 of Part V,

in whlch s.52 appears, is given the effect it would have

if a reference in that dlvislon to a corporation included

a reference to a person not belng a corporation (s.6(3)(c)).

Counsel for the applicant stated that he did not

rely upon s . 6 but upon s.75B of the Act. That section

provides that a reference in Part VI - Enforcement and

Remedlec to a person involved In a contravention of a

provision of Part IV or V 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, dlrectly or

indirectly, knowingly concerned In,

or party to, the contravention: or

10.

(d) has conspired wlth others

to effect the contraventlon".

The significance of s.75B is that s .82 provides

that a person who suffers loss or damage by conduct of

another that was done rn contravention of a provision of

Part IV or V may recover the loss or damage by actlon

against that other person "or against any person lnvolved

in the contravention". In other words, whlle s.52 is aimed

only at the conduct of a corporation, s . 8 2 makes liable to

compensate an inlured party a person who has been involved

in a contravention in the sense spoken of by s.75B.

The respondents dld not contend that m this respect

s.82 exceeded the constitutional authority of the Federal

Parliament or that the section was in any other respect invalld.

In my view the statement of claim does disclose a

cause of action or trlable issue under the Trade Practices Act

against the second respondent. I answer this question - yes.

5.      If the statement of claim does not disclose any

cause of actlon or trlable issue under s.52 of the

Trade Practices Act or otherwlse under that Act against

the flrst and second respondent or elther of them,

does thls Court have lurisdictlon to hear and determine

the clams of the applicant against the respondents

under the defamation laws of Western Australia?

The answer to this question is self evidently no and

the respondents did not contend otherwise. The Federal Court

has no jurisdictlon to entertain a claim under the

11.

defamation laws of Western Australla unless that clam

is brought as part of the associated	~urisdlctlon
of the court.

6. If the statement of claim does dlsclose a cause of

action or triable issue under s.52 of the Trade

Practices Act or otherwlse under that Act agalnst

the flrst and second respondents, or either of them, does this court have jurisdiction to hear and determme the clalms of the applicant against the

respondents under the defamation laws of Western

Australla?

In arguing that this question should

be answered in the negative, counsel for the respondents

drew attention to the fact that the range of defences in a

defamation actlon may be considerably wider than in an action

brought under s.52 of the Trade Practices Act. That may

well be the case; I express no opinion on the matter. But

it was not suggested by the applicant that if this court

has jurisdiction to entertain the defamation clam, defences

avallable to the respondents at common law or by case that there are fewer defences available to the

statute would not be available to them before thls court.

respondents in answer to a claim under s.52 than in answer

to a claim in defamation, the answer must in colloquial

terms be "so what". They are dlfferent causes of action. What has to be established in each case is different and

12.

the defences available are dlfferent.

The answer to thls question must be approached

wlth reference to the ludgment of the Hlgh Court in

Phllip Morris Inc. v. Adam P. Brown Male Fashions Pty. Ltd.

(1980-81) 33 ALR 465, a decision which	I discussed m
Muller v. Fencott (1982) ATPR 40-266.	See too the recent

analysis by Fltzgerald J. in L.E. Stack v. Coast Securlties

No. 9 Pty. Ltd. (unreported declslon delivered 23 March 1983).

The criterlon for associated jurrsdlction may

be said to be whether there is a common substratum of

facts relating to the cause of action In respect of whlch

~urisdiction exists under the Trade Practices Act and to

the cause of action sought to be attached thereto.

Mr. Malcolm QC, counsel for the applicant, described the

present case as a paradigm one and I am lnchned to agree

The facts alleged in support of the clam under s.52 and

the facts alleged in support of the claim in defamatlon

are not only slmllar but are for all practlcal purposes

identlcal.

The jurlsdictlon of this court to entertain the

claim in defamation must be determined on the basis of the

facts alleged in the statement of claim, assumed for the

purpose of present proceedings to be correct. In that event

and consistent wlth the views expressed by the ma~ority of

the High Court in Philip Morris Inc.,with my own decislon

in Muller v. Fencott and with the views expressed by

1 3 .

St. John J. in Alnsworth Consolldated Industries Llmlted

v. Unlversal Telecasters Queensland Limited (unreported

decislon delivered 11 November 19821, the answer to thls

question must be - yes.

In the llght of these answers it 1s approprrate

that the notice of motion be dlsmissed as it was common

ground that It sought to ralse no issues other than those

referred to in the case stated.

The formal order should, I think, answer each

of the questlons reserved for determination of the court,

dlsmiss the notice of motion and direct that the

respondents pay the applicant's costs of the motion and

case stated, to be costs in the cause.

I certify that this and the twelve

preceding pages are a true copy of the

Reasons for Judgment herein of his

Honour Mr. Justice Toohey

Associate

Date: 19 Aprll 1983