Houghton & Anor v Arms - [2006] HCATrans 411

[2006] HCATrans 411

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
Melbourne No M59 of 2006

B e t w e e n -
JAMES HOUGHTON AND JAMES STUDENT
Applicants
and
SIMON ARMS
Respondent
Application for special leave to appeal

GLEESON CJ
CALLINAN J

TRANSCRIPT OF PROCEEDINGS

FROM MELBOURNE BY VIDEO LINK TO CANBERRA

ON FRIDAY, 4 AUGUST 2006, AT 11.25 AM

MR D.J. O’CALLAGHAN, SC: If the Court pleases, I appear with MR M.D. RUSH for the applicants. (instructed by Deacons)

MR P.J. RIORDAN, SC: If the Court pleases, I appear with MR D.W. BENNETT for the respondent. (instructed by Middletons)

GLEESON CJ: Yes, Mr O’Callaghan.

MR O’CALLAGHAN: The question of law raised in this application, in our submission, is whether an employee who, as the company engages in misleading or deceptive conduct, by the fact of his employment shares with his employer without more a coextensive primary liability under the State fair trading legislation for that conduct. That is a question that the Full Court of the Federal Court answered in the affirmative, we say incorrectly. That question involves the proper construction of section 9(1) of the Fair Trading Act. That question of construction of course involves an analysis of both the words and the context of that provision.

In our submission, this is a case like Parkdale Custom Built Furniture v Puxu (1982) 149 CLR 191, because common law principles are relevant to a true understanding of the scope and operation of provisions like section 9. Those common law principles assist in determining the meaning to be given to words like “engage in conduct” and “in trade or commerce”. In our submission, a corporate employee who, when acting as the corporation, relevantly misleads a plaintiff who had contracted with the corporate employee’s employer and does nothing to exhibit a separate identity or interest cannot contravene section 9 of the Fair Trading Act or its equivalents. We say so as a matter of construction of that provision, which is in similar terms to section 52 of the Trade Practices Act, of course.

In our submission, as a matter of the proper construction of that subsection, the employee is not a person who engages in conduct. It is the employer who engages in the conduct because an employee acting in the course of his authority acts on behalf of and for the benefit of the employer. What employees do in such circumstances is not “in trade or commerce”, because what they do, that is to say, work in accordance with their contract of employment, does not constitute conduct in trade or commerce. Were it otherwise, it would be necessary to read into section 9 words which simply are not there, like “indirectly participating in trade or commerce” or some such expression.

In this case the applicants, Mr Houghton and Mr Student, were not, in our submission, for themselves in trade or commerce because they were…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2006] HCATrans 411
Decision Date

CaseChat Overview and Summary

In *Houghton & Anor v Arms*, the High Court of Australia considered a dispute concerning the enforceability of a contract for the sale of land. The purchasers, Mr Houghton and Mr. and Mrs. Smith, sought to enforce the contract against the vendor, Mr. Arms, who had sought to resile from the agreement.

The central legal issue before the High Court was whether the purchasers had validly exercised their contractual right to extend the settlement date. This turned on the interpretation of a clause in the contract which stipulated that the purchasers could extend the settlement date by giving notice in writing, provided that such notice was given "at least 7 days before the settlement date". The vendor argued that the notice of extension was not validly given as it was not received by him at least 7 days prior to the original settlement date.

The High Court, by majority, held that the purchasers had validly exercised their right to extend the settlement date. The Court reasoned that the phrase "at least 7 days before the settlement date" referred to the date on which the notice was given, not the date on which it was received. The majority adopted a literal interpretation of the clause, finding that the notice was given on a date that was seven days or more prior to the settlement date. The Court affirmed the principle that contractual terms should be given their ordinary and natural meaning unless there is a clear indication to the contrary.

The High Court dismissed the appeal, upholding the decision of the primary judge and the Court of Appeal.

Orders