Electpark and Anor v Ministry of Fair Trading and Anor P2/2000

[2000] HCATrans 646

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Perth  No P2 of 2000

B e t w e e n -

ELECTPARK PTY LTD

First Applicant

FURNPARK PTY LTD

Second Applicant

and

MINISTRY OF FAIR TRADING

First Respondent

PATRICK WALKER

Second Respondent

Application for special leave to appeal

GLEESON CJ
GUMMOW J
CALLINAN J

TRANSCRIPT OF PROCEEDINGS

AT PERTH ON FRIDAY, 27 OCTOBER 2000, AT 10.04 AM

Copyright in the High Court of Australia

MR M.L. BENNETT:  I appear for the applicant, your Honours.  (instructed by Bennett & Co)

MR G.T.W. TANNIN:  If the Court pleases, I appear with my learned friend, MR J.A. THOMSON, for the respondent.  (instructed by Crown Solicitor’s Office (WA))

GLEESON CJ:   Yes, Mr Bennett.

MR BENNETT:   Your Honours, retail trading in the State of Western Australia, at least the hours of operation, are governed by one piece of legislation, the Retail Trading Hours Act.  The principal definition and concept within the scope of that legislation unsurprisingly is the definition of a retail shop.  The point of appeal takes issue with the Full Court’s interpretation and construction of the definition of “retail shop”.  For that purpose, I apologise that paragraph 1 of the statement filed in reply to the respondent’s argument ‑ ‑ ‑

GLEESON CJ:   Mr Bennett, did the issue arise because there was a question whether individual franchisees could, as it were, differentially operate on Sunday, with some trading and some not trading?

MR BENNETT:   In part, yes, and in part as well, because in order to qualify for Sunday trading, you needed a limited number of employees.  If you aggregated all of the franchisees operations, you exceeded the 10 persons engaged in business.  If you separated them, you were under 10.  But one franchisee of a computer store had more than 10 by itself and elected never to trade on a Sunday.  The error, with respect, by the Full Court can be demonstrated by considering paragraph 15 of the reasons for decision of Justice Ipp, with whom their Honours otherwise concurred at page 25 of the application book, and if your Honours go to the last sentence in paragraph 15, the error is to reintroduce into the definition of a retail shop the ordinary meaning of the term “retail shop”, so to introduce an imprecise concept of what a retail shop means in common parlance.

If your Honours go back to page 24 of the application book and look to paragraphs 12 and 13, the way in which the error creeps in is rather like a piece of furniture that you assemble yourself, that has been assembled incorrectly, with respect to his Honour.  Paragraph 12 sets out, accurately, the definition of “retail shop” and paragraph 13 accurately identifies the definition as a specific definition “conclusive and exhaustive”:

retail shop means any place…..at, in, on or from which goods are sold by way of retail sale – - -

CALLINAN J:   Mr Bennett, was there a practical problem that if some did not want to trade and others did, that you could not effectively shut one off from the other.  Was that a problem?

MR BENNETT:   No, your Honour, only in respect of electrical goods sold by Electpark and a small appliance.  All others had security roller shutters that could be brought down.

CALLINAN J:   But were the two that you have just mentioned separate franchisees?

MR BENNETT:   Yes, your Honour.

CALLINAN J:   And they could not be effectively separated from each other?

MR BENNETT:   One could not choose to be open without the other being open, yes, your Honour.

CALLINAN J:   Well, would that not be a possible problem?  Might not that be a reason, or might show why the decision of the Full Court was right?

MR BENNETT:   If your Honour has in mind a markets where adjacent stalls are set up next to one another, they cannot be physically shut off from each other, but they can trade within the definition of a retail shop under the Act.  So, physical separation ‑ ‑ ‑

CALLINAN J:   But what, as a practical matter, would happen if one of them wanted to trade and the other did not?  Would there be security risks in relation to the one that did not want to trade?

MR BENNETT:   There may be a security risk.  The practical situation is one would man their cash registers and the others cash registers would not be manned and they would not accept sales.

CALLINAN J:   But people would be able to wander through and the goods of the non-trader might well be removed or stolen.

MR BENNETT:   There may be, but that would be a separate issue as to whether or not he operates a retail shop.  If I can show you where the common parlance meaning of retail shop is, with respect, incorrectly introduced.  It appears ‑ ‑ ‑

GUMMOW J:   Where is the provision that imposes the actual prohibition, the legal prohibition?

MR BENNETT:   The Retail Trading Hours Act provides, in paragraph 12, that:

a general retail shop shall be closed –

(a)  on Monday, Tuesday, Wednesday…..until 8 a.m. and from and after 6 p.m.

Then sub-paragraph (1)(d), “on Sunday in each week”.  Pursuant to the legislation ‑ ‑ ‑

GUMMOW J:   You said general retail shop.

MR BENNETT:   That is right, your Honour.

GUMMOW J:   Is that defined?

MR BENNETT:   No, your Honour, only “retail shop” is defined.  Special retail shops are and you have different categories for service stations and the like.  There is a facility under the Act pursuant to subordinate legislation, the Retail Trading Hours Exemption Order (No 12) 1994 for some general retail shops to obtain an exemption if they fulfil categories, not own individual stores.  It is operated for the benefit of eligible persons who are actively engaged in the operation and “not more than 10 persons…..work in the general retail shop at any one and the same time”.

If your Honours see paragraph 15 where his Honour Justice Ipp applies the Macquarie Dictionary definition to find out the natural meaning of the word “place” as being “a space or spot, set apart or used for a particular purpose”.  What his Honour does is substitute for the “particular purpose” the words “retail shop” when, in our respectful submission, within the structure of section 3(1) of the Act, the purpose is specifically given by subsections (a), (b) and (c), which is:

(a)  goods…..are sold by way of retail sale;

(b)  goods are displayed…..; or

(c)  prescribed services are provided –

By taking the definition of “place” an inclusive definition and using that to reintroduce the common meaning of the word “retail shop”, their Honours in the Full Court introduced the imprecise concepts of what the public might perceive to be a retail shop.  If it looks like a large department store then it is not a retail shop for the purposes of the Act.

The Act, properly construed, we would say, simply requires that it be a place, including “a building, stall, tent, vehicle, boat or vessel”, being a space or spot set apart or used for the purpose of goods being “sold by way of retail sale”, to pick up subparagraph (a), or goods “displayed, kept or sold for retail sale”, and it could not be, in the facts of this matter, otherwise contended that each of the areas was a place set apart for goods to be sold by retail sale, that it did not look like an ordinary store or a shop.  But that, in our respectful submission, was a matter well beyond the proper construction of the Act.

CALLINAN J:   Other States have this sort of legislation – I know there is some in Queensland.  I do not know whether the same problem arises there or elsewhere.

MR BENNETT:   There is no other State, our research has disclosed, your Honour, that have precisely this definition ‑ ‑ ‑

CALLINAN J:  Where this problem arises.

MR BENNETT:   We have identified some of the statutes and the matters in reply say that they have different definitions.  We accept that, but even if this matter were limited to Western Australia, the concept of a retail shop is the fundamental concept in a Retail Trading Hours Act that governs retail trading for all of the citizens of Western Australia.

GUMMOW J:   What was the nature of the proceeding before Mr Justice Heenan?  It was a declaration, was it?

MR BENNETT:   Yes, we were entitled to the grant – it was actually a prerogative writ, that we were entitled to the grant of an exemption certificate by the Chief Executive Officer of the Ministry of Fair Trading.  The exemption order required that you fulfil all the factual matters and get a certificate from the Chief Executive.  The Chief Executive had declined to issue the certificate on what we contended was an incorrect interpretation of the Act.  We accept that there are other matters found against us by the learned trial judge, Justice Heenan ‑ ‑ ‑

GUMMOW J:   So what, you were seeking mandamus, were you?

MR BENNETT:   Yes, raised by way of appeal, but their Honours in the Full Court declined to give reasons for decision in respect of those matters deciding only the principal point on the construction of whether these franchisees operated a retail shop.

GUMMOW J:   So there may be other issues there.

MR BENNETT:   That is why the relief sought by way of the appeal is to remit the matter to the Full Court to determine the other issues that were argued before them, your Honour.

GUMMOW J:   What is the range of those other issues?

MR BENNETT:   The question was where franchisees carried on business and paid part of the profits to the franchisor, could it be said that that operation was carried on for the benefit of the eligible person, namely, the franchisee?  His Honour Justice Heenan introduced a concept of predominant benefit, or substantial benefit, which raised, in our respectful submission, we put to the Full Court, questions of, “If you run a business at a loss, can you say you are running it for the benefit of a person?”, or, “After tax, can you run it for the benefit?”, and it was, with respect to his Honour Justice Heenan, an incorrect interpretation of the concept of “benefit” which we submitted should be beneficial ownership.

His Honour Justice Heenan said we had more than 10 persons because workmen from another operation came in to organise deliveries.  Our submission in that was that you could not lose your right to trade on Sunday because you had some chap on your roof fixing the air conditioning on the day, and it took you over the magic number of 10.  People working within the business must be the employees of the business and not people not associated with the business.  So there were issues of interpretation that were otherwise raised.

GUMMOW J:   Well, that was one.

MR BENNETT:   There were two.  The third was the question of whether or not we were eligible persons and there were, essentially, six grounds of appeal that were raised before this.  The issue that their Honours in the Full Court dealt with was the third issue.

GUMMOW J:   Yes, I see.  Yes, the grounds of appeal are at page 17 of the book.

MR BENNETT:   That is right.  The question of benefit was the fifth ground.  The question raised in paragraph 2 was whether, if the Act says that you can be a retail shop if you have warehousing, should the area of an independent separately-owned business that carried out warehousing services and delivery services, be aggregated with ours.  We did not cavil from the proposition that that could be a separate shop but it is just not our shop, was the issue that was involved there.

GUMMOW J:   Yes, thank you.

MR BENNETT:   Their Honours were right to say that this was essential issue.  They are the submissions we put in support of our application.

GLEESON CJ:   Thank you, Mr Bennett.  Yes, Mr Tannin.

MR TANNIN:   May it please the Court, the question below did not concern whether a shop existed, it concerned the question of degree, that is, the extent of that shop, and their Honours found, properly, with respect, that the determination of that question was to be made by reference to how the place operated and included in how it operated was how it appeared.  All of that, with respect, is consistent with what the Act seeks to do and that is to ban trade on Sundays by the larger general retail shops.  The concepts of general retail shops, small retail shops, special retail shops and filling stations, are expressly referred to as distinct in section 10 of the Act, although not otherwise defined there.  In our respectful submission, there is nothing in the grounds ‑ ‑ ‑

GUMMOW J:   The distinctions are drawn on page 8 of the primary judge’s judgment.

MR TANNIN:   Indeed, they are, your Honour.  With great respect to my friend, there is nothing in the definition referred to by his Honour Justice Ipp with which the other judges agreed, that he has pointed out as being in any way incorrect.  The decision is manifestly correct, in our respectful submission.  The area has to be defined by its actual operation. The applicants do not put up any definition that, or any suggestion of how otherwise you might define the existence of a shop.  As to the suggestion that there is some issue of public importance in this, there is no grounding put up for that at all.

I might respond also to one of the suggestions by my friend.  There were a number of other issues determined by the original judge which were not referred to by the Full Court.  But one example he gave was this proposition about the magic number 10, that, for example, if you were trading beyond the number 10 you did not come within the exemption created under the Henry VIII clause that allowed the Minister to grant an exemption.  In the evidence which, if your Honours would look to page 12 of the application book, his Honour Justice Heenan found that the retail shop comprised “not only the showroom” - it was not a matter of people climbing up on the roof, “not only the showroom” but those places where services were provided.

This was a complex where an administration facility was provided by the franchisors and there was also a warehousing facility provided.  In

the Act, as a matter of calculating what a “place” is, in section 3(2), it is provided that:

For the purposes of this Act a place at which –

(a)   orders are received or obtained for the retail sale of goods services; or

(b)   goods are held or stored for the purposes of retail sale,

is a retail shop notwithstanding that the goods or services are supplied, or, the orders are received or obtained, at another place.

So, with great respect, his Honour was entirely correct in finding that it was proper to have regard to those numbers of persons working in the warehousing area and in the administration area.  On that issue they would fail.

GLEESON CJ:   Thank you, Mr Tannin.  Mr Bennett, do you want to put anything in reply?

MR BENNETT:   Can I say in relation to the last matter put up by my friend, the proposition is not that warehousing is something other than a retail shop.  The proposition is that somebody else’s retail shop.  The fact that services are carried out, does not mean that you aggregate all the staff of a firm of accountants just because they do the books for a small shop.

In respect of the proposition that you define a shop by reason of its appearance, we would say that that is the fundamental error that is introduced by incorporating in what is otherwise a specific definition the common law meaning, or the common parlance view of what constitutes a “shop”.  There is plainly a sensible way of construing “shop” which we put up without reference to appearance.  It means a place that is demarked or set up or set apart.  How it is set apart is not specified by the Act.  There is no limit on set apart as opposed to walls, brick, metal, wood or some other form of setting apart.

The Act allows the setting apart to be done by whatever process can physically distinguish one area from the other and it is not in doubt in respect of this matter that the areas were physically set apart.  They were identified on plans annexed to every franchisee’s licence showing the area that they were capable of occupying, and that was found by the learned trial judge.  Those are the matters we would put in reply, your Honour.

GLEESON CJ:   The Court is of the view that the conclusion reached by the Full Court of the Supreme Court of Western Australia in this matter was well open to it on the evidence in the case and for that reason the application should be dismissed.

Can you resist an order for costs, Mr Bennett?

MR BENNETT:   No, your Honour.

GLEESON CJ:   The applicant must pay the respondent’s costs of the application.

AT 10.21 AM THE MATTER WAS CONCLUDED