Ibrahim v Considine Architects
[2008] FMCA 1148
•29 August 2008
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| IBRAHIM v CONSIDINE ARCHITECTS | [2008] FMCA 1148 |
| TRADE PRACTICES – Misleading and deceptive conduct – whether Respondent a corporation – whether extended coverage of corporations under section 6 applies – contract for services – alleged misleading and deceptive conduct in relation to payment of superannuation and deduction of taxation – whether conduct in trade or commerce. |
| PRACTICE AND PROCEDURE – Application to set aside orders dismissing application for non-appearance – principles – basis for setting aside orders – whether arguable case on merits. |
| Architects Act 2004 (WA) Business Names Act 1962 (WA) s.7(4) and (5) Federal Magistrates Court Rules 2001 (Cth) rr.13.03A(c), 16.05(2)(a) Trade Practices Act 1974 (Cth) ss.6, 52, 86(1A) |
| Actors and Announcers Equity Association v Fontana Films Pty Ltd (1982) 150 CLR 169 Boase v Seven Network (Operations) Ltd [2004] WASC 245 Barto v GPR Management Services Pty Ltd & Anor (1991) 33 FCR 389; (1991) 105 ALR 339 |
| J.D. Heydon, Trade Practices Law (Vol 1) (Sydney: Law Book Company) C. Lockhart, The Law of Misleading or Deceptive Conduct (Second Edn) (Chatswood: Lexis Nexis Butterworths, 2003) J.J. Macken, et al, The Law of Employment (5th Edn) (Sydney: Law Book Company, 2002) R.V. Miller, Miller’s Annotated Trade Practices Act (29th Edn) (Sydney: Thomson Lawbook Co, 2008) A Stewart, Stewart’s Guide to Employment Law (Sydney: The Federation Press, 2008) The Shorter Oxford English Dictionary on Historical Principles (Vol. 1) (Oxford: Clarendon Press, 1973) |
| Applicant: | TAREK IBRAHIM |
| Respondent: | CONSIDINE ARCHITECTS |
| File Number: | PEG 58 of 2008 |
| Judgment of: | Lucev FM |
| Hearing date: | 15 August 2008 |
| Date of Last Submission: | 15 August 2008 |
| Delivered at: | Perth |
| Delivered on: | 29 August 2008 |
REPRESENTATION
| Applicant: | In Person |
| Counsel for the Respondent: | Ms C Bahemia |
| Solicitors for the Respondent: | Carol Bahemia Lawyers |
ORDERS
The Applicant’s Application in a Case be dismissed.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT PERTH |
PEG 58 of 2008
| TAREK IBRAHIM |
Applicant
And
| CONSIDINE ARCHITECTS |
Respondent
REASONS FOR JUDGMENT
Introduction
The Applicant applied in the Court’s trade practices jurisdiction[1] alleging misleading and deceptive conduct[2] by Considine Architects in relation to:
a)representations by the Respondent concerning the hourly rate of payment for work performed by the Applicant for the Respondent, and in particular the payment of superannuation entitlements and deductions for taxation; and
b)subsequent representations concerning disputes over the hourly rate of payment allegedly made by the Respondent to the Western Australian Industrial Relations Commission[3] and Centrelink.
[1] Trade Practices Act, 1974 (Cth) s.86(1A) (“TP Act”).
[2] TP Act, s.52.
[3] “WAIRC”.
On 19 May 2008 the Application was dismissed when the Applicant failed to appear at the First Court Date.[4]
[4] Federal Magistrates Court Rules, 2001 (Cth), r.13.03A(c) (“FMC Rules”).
On 26 May 2008 the Applicant made an Application in a Case to have the dismissal order set aside.[5] The Application in a Case was heard on 15 August 2008.
[5] FMC Rules, r.16.05(2)(a): the Court may vary or set aside orders after entry where the orders were made in the absence of the party.
Issue
The issue in these proceedings is whether the dismissal order made on 19 May 2008 ought to be set aside, and in that regard in relation to whether the Applicant has an arguable case on the merits, whether:
a)the Respondent is a corporation; and
b)the alleged conduct was “in trade or commerce”,
for the purposes of s.52 of the TP Act.
Principles – setting aside orders previously made
In Singh v Official Trustee in Bankruptcy & Anor this Court set out the bases on which it might set aside orders made in the absence of a party, namely:
“a) that there is an adequate reason for the non‑appearance;
b) that there is no delay in making the application to set aside;
c)whether the party in whose favour orders have been made would be prejudiced by a new hearing in any respect which could not be adequately compensated by a suitable award of costs or the giving of security; and
d)that there is an arguable case on the merits of the substantive application.”
Adequate reason for non-appearance
The Applicant says that he was unaware that the First Court Date was written on the copies of the Application given back to him by the Court’s Registry at the time the Application was filed.[7] The Applicant says at the time he filed the Application he thought the system was similar to that which he says operates in the Magistrates Court of Western Australia where the hearing date is not determined until a respondent (or defendant) evinces an intention to defend the proceedings.[8]
[7] Applicant’s Affidavit, sworn 26 May 2008, para. 1 (“Applicant’s Second Affidavit”).
[8] Applicant’s Second Affidavit, para. 4.
The Applicant says that he was waiting for the Court to send him a hearing date after the Respondent had filed a Response.[9] The Respondent has not yet filed a Response.
[9] Applicant’s Second Affidavit, para. 5.
The Applicant also says that he was at the Registry on the day of the First Court Date (he does not say what time but it probably does not matter) making an enquiry concerning default judgment in this matter.[10]
[10] Applicant’s Second Affidavit, para. 8.
Finally, the Applicant says that had he been aware of the First Court Date he would have attended Court.[11]
[11] Applicant’s Second Affidavit, para. 9.
The Respondent did not challenge the Applicant on this issue. There was no application to cross-examine on any issue in the Application in a Case.
The Court must determine this issue on the basis of the Applicant’s evidence. Whilst the Court finds it difficult to see why the Applicant did not see the First Court Date put on the Application in the Registry, the Applicant’s evidence that he did not see the date must be accepted, in the absence of any challenge and if it is not inherently incredible. There was no challenge and it is not inherently incredible. It might be doubted, but it is possible that a litigant familiar with the processes of other courts, might not have looked for or seen the date on the copy of the Application returned to him.
The fact that the Applicant did not see or apprehend that the First Court Date was set down for 19 May 2008 is supported by the evidence that he was at the Registry on that day making enquiries about the default judgment process because he believed, correctly, that the Respondent had not filed a Response. It is significant that the Applicant attended the Registry of the Court on the day that the hearing was listed. That fact lends credence to his assertion that he was unaware of the First Court Date.
There is no reason to doubt the Applicant’s evidence that he would have attended Court on the First Court Date had he realised or known that the matter was listed. Again, the fact that he attended at the Registry on that date lends credence to his evidence.
Do the foregoing circumstances give rise to an adequate reason for non-appearance on the First Court Date? The Court notes that the reason need only be “adequate”, that is, “sufficient” or “suitable”.[12] A failure to attend on the First Court Date by reason of the Applicant’s unawareness of that date arising from his erroneous assumption that the Registry processes of this Court would operate similarly to those of other courts, and in circumstances where the Applicant attended the Registry of the Court on the day of the hearing is, in the Court’s view a sufficient, and therefore adequate, reason, for the Applicant’s non-appearance on the First Court Date.
[12] The Shorter Oxford English Dictionary on Historical Principles (Vol. 1) (Oxford: Clarendon Press, 1973) p.23.
No delay in making application to set aside
The Application in a Case was made seven days after the dismissal order was made by the Court. The Court’s orders of 19 May 2008 were posted to the Applicant, and in the ordinary course of post would have arrived on 21 or 22 May 2008. The Application in a Case to set aside the dismissal order was made on 26 May 2008.
The fact that the Applicant is a self-represented litigant, and that English is clearly his second language, are factors warranting consideration in whether a delay of two to three days before making the application to set aside the dismissal order is undue delay.
The Court notes that the Respondent did not suggest that there was undue delay on the part of the Applicant in making the Application in a Case to set aside.
In the Court’s view there was, for practical purposes, no unwarranted delay in making the Application in a Case to set aside, it having been made within two to three working days of receipt of the dismissal order by the Applicant. Further, the fact that the Applicant was a self-represented litigant for whom English is a second language might ordinarily give rise to some delay while legislation and Court rules are read and considered, and possible courses of action pondered, in relation to matters with which the Applicant is not necessarily familiar must be taken into consideration. Here, however, there was, effectively, no delay.
In all the circumstances, the Court does not consider that there was any delay warranting further consideration of the Application in a Case being precluded.
Prejudice to the Respondent
The Court notes that the Respondent did not suggest that there was any prejudice which it might suffer if the Application in a Case was granted which could not adequately be compensated by a suitable award of costs. There seems no reason why any future prejudice arising from the setting aside of the dismissal order might not be overcome by an appropriate costs order at the time any final orders are made.
In the circumstances, the Court considers that there is no prejudice to the Respondent which could not be adequately compensated by a suitable award of costs as part of any final order.
Arguable case on the merits of substantive application
Section 52
Section 52(1) of the TP Act provides that a corporation shall not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive.
Corporation
The conduct complained of must be engaged in by a corporation, unless s.6 of the TP Act applies.
Section 4(1) of the TP Act defines “corporation” as follows:
“corporation means a body corporate that:
(a) is a foreign corporation;
(b) is a trading corporation formed within the limits of Australia or is a financial corporation so formed;
(c) is incorporated in a Territory; or
(d) is the holding company of a body corporate of a kind referred to in paragraph (a), (b) or (c).”
Section 4(1) of the TP Act defines “financial corporation” as follows:
“financial corporation means a financial corporation within the meaning of paragraph 51(xx) of the Constitution and includes a body corporate that carries on as its sole or principal business the business of banking (other than State banking not extending beyond the limits of the State concerned) or insurance (other than State insurance not extending beyond the limits of the State concerned).”
Section 4(1) of the TP Act defines “foreign corporation” as follows:
“foreign corporation means a foreign corporation within the meaning of paragraph 51(xx) of the Constitution and includes a body corporate that is incorporated in an external Territory.”
Section 4(1) of the TP Act defines “trading corporation” as follows:
“trading corporation means a trading corporation within the meaning of paragraph 51(xx) of the Constitution.”
As to the corporate status of the Respondent:
a)nothing is said in the Application;
b)the Applicant’s First Affidavit contains a reference to “Jeff Considine” and “his partner Phil at the time”;[13]
c)there is nothing concerning the corporate structure of the Respondent in the Application in a Case or the Applicant’s Second Affidavit in support of the Application in a Case;
d)Considine asserts that:
i)he is the proprietor of the “firm Considine Architects”;[14]
ii)Jeffrey John Trevor Considine trading as Considine Architects is a registered practising architect in Western Australia in accordance with the Architects Act 2004 (WA);[15]
iii)he carries on practice as a registered architect under the name Considine Architects, and that the name Considine Architects is a registered business name under s.7(4) and (5) of the Business Names Act 1962 (WA);[16] and
iv)Considine Architects is not a body corporate, and that Considine himself does not trade as an incorporated body.
[13] Applicant’s Affidavit, sworn 14 April 2008, para. 6 (“Applicant’s First Affidavit”).
[14] Affidavit of Jeffrey John Trevor Considine, dated 21 July 2008, para. 1 (“Considine’s Affidavit”).
[15] Considine’s Affidavit, para. 1 and Annexure JJTC1.
[16] Considine’s Affidavit, para. 2 and Annexure JJTC2.
There is no definition of “body corporate” in the TP Act. However, the “term encompasses any office or group of people recognised at law as having separate legal personality. Corporations whether incorporated under the Corporations Act 2001 or by special statute, come within the [term].”[17] It follows that individual sole traders and partnerships do not come within the term.
[17] R.V. Miller, Miller’s Annotated Trade Practices Act (29th Edn) (Sydney: Thomson Lawbook Co, 2008) p. 87, para. 1.4A-10.
The evidence in this case indicates that Considine Architects is the business name of a firm run by Mr Considine as a sole trader. At best for the Applicant (on the Applicant’s own evidence) the firm might be a partnership (“his partner Phil at the time”)[18] but the evidence is so flimsy that the Court could not properly arrive at that conclusion. The evidence is that Considine Architects is not a body corporate, and therefore cannot be a corporation as defined in the TP Act. Even if Considine Architects were a body corporate, the evidence is insufficient to establish that it is:
a)a foreign corporation;
b)a financial corporation, that is one involved in finance or financial matters;[19]
c)a trading corporation, that is one whose predominant and characteristic activity is trading, whether in goods or services;[20] or
d)a holding corporation for one of the foregoing types of corporation.[21]
[18] Applicant’s First Affidavit, para. 6.
[19] Re Ku-ring-gai Co-operative Building Society (No.12) Limited (1978) 36 FLR 134 at 159 per Deane J; see also State Government Insurance Corporation v GIO (NSW) (1991) 28 FCR 511 (where a government insurance office was held to be a financial corporation); State Superannuation Board v Trade Practices Commission (1982) 150 CLR 282 (where the State Superannuation Board was held to be a financial corporation) and Parramatta Tourist Services Pty Ltd v SWB Family Credit Union Limited (1979) 24 ALR 273 (where a credit union incorporated under the Co-Operation Act 1923 (NSW) was held to be a financial corporation).
[20] Australian Workers’ Union of Employees, Queensland v Etheridge Shire Council [2008] FCA 1268 at paras. 78-86 per Spender J, and the cases there cited.
[21] Assuming for present purposes that para (d) of the definition of “corporation” is constitutionally valid, which it may not be: see Actors and Announcers Equity Association v Fontana Films Pty Ltd (1982) 150 CLR 169 at 195 per Stephen J, 209 per Mason J, 215 per Aickin J agreeing with Mason J (invalid), 180-81 per Gibbs CJ, 215 per Wilson J agreeing with Gibbs CJ (validity questionable); and 212 per Murphy J (valid).
It is not sufficient to assume that because Considine Architects is a firm of architects trading as such that its predominant and characteristic activity is the trading of architectural services. Even if this was established (which it is not), it would not get around the difficulty faced by the Applicant in that Considine Architects is not a body corporate.
The Court is therefore satisfied that Considine Architects is not a corporation, and s.52 of the TP Act does not apply to it, unless s.6 of the TP Act applies.
Section 6
The effect of s.6 of the TP Act has been described as follows:
“…, in s.6 an attempt is made to achieve the effect of parts of the old s.7, by enacting further laws standing beside the ‘corporate’ Trade Practices Act. Section 6(2) enacts a ‘non-corporate territories and interstate/international trade’ Trade Practices Act. Section 6(3) enacts a ‘post and telegraphs’ consumer protection and fair trading Act. Section 6(4) enacts a limited ‘territories’ Act. Section 6(5) extends the operation of s.73 to relieve a debtor of the obligation under s73(5) to sue a supplier (being a natural person) linked to a credit provider where the supplier has died or become bankrupt or the supplier’s affairs are being dealt with under Pt X of the Bankruptcy Act 1966.”[22]
[22] JD Heydon, Trade Practices Law (Vol 1) (Sydney: Law Book Company) para. 2.50.
None of these effects applies in this case, and there is nothing to warrant the application of s.6 to the Applicant’s Application.
The Court therefore considers that the provisions of s.6 of the TP Act do not apply to this Application.
Conclusion - corporation
Because the Court has determined that:
a)the Respondent is not a corporation; and
b)section 6 of the TP Act does not apply,
this Court does not have jurisdiction to consider the Application under s.52 of the TP Act.
In trade or commerce
The Respondent also contends that the conduct alleged by the Applicant is not “in trade or commerce” for the purposes of s.52 of the TP Act.
Conduct alleged
The Court is therefore required to set out the conduct alleged by the Applicant in the Applicant’s First Affidavit, which is the only evidence of the conduct alleged before the Court. At the outset, it must be said that the Applicant’s First Affidavit does not set out the conduct alleged in a particularly clear manner. The Court has done its best to determine what the relevant conduct alleged is, and that is set out below:
a)the Applicant was offered a contract position to work for Considine Architects in or around June 2006 and the terms of the contract consisted of a flat hourly rate of payment of $45 with no annual or sick leave payable;[23]
[23] Applicant’s First Affidavit, paras. 1-2.
b)it appears that the contract was a contract for services establishing a relationship of principal and contractor, and not a contract of services establishing a relationship of employer and employee;[24]
[24] Applicant’s First Affidavit, paras. 1-3. For a general overview of the distinction between the relationship of principal and contractor and that of employer and employee, see JJ Macken, et al, The Law of Employment (5th Edition) (Sydney: Law Book Company, 2002) pp 6-17 and 23-24 and A Stewart, Stewart’s Guide to Employment Law (Sydney: The Federation Press, 2008) pp 46-50.
c)a dispute arose as to whether or not the Applicant had been paid for a period of four hours, but a few weeks after that dispute arose, the Applicant ceased working with the Respondent;[25]
[25] Applicant’s First Affidavit, paras. 6-12.
d)the Applicant and Mr Considine remained in contact, and in mid-March 2007 the Applicant commenced work for the Respondent again, and again on the basis of principal and contractor, but on this occasion for an hourly rate of $40;[26]
e)after the engagement commenced Mr Considine told the Applicant that superannuation was to be deducted from the hourly rate, and although the Applicant was “very unhappy” he “accepted it reluctantly”;[27]
f)following a review of his payslips in late April 2007 the Applicant concluded that he was being paid $33 an hour plus about $3 superannuation, instead of the $40 which had been agreed;[28]
g)discussions were held involving the Applicant, the Respondent’s bookkeeper and Mr Considine, in which Mr Considine asserted that the $7 difference (between $33 and $40) was superannuation plus a deduction for taxation;[29]
h)the Applicant re-calculated the figures at home following the discussion referred to above and concluded that he had been misled, because on his calculations taxation was deducted out of the $33 payment, and not the additional $7 which should have made the payment up to $40 (but which, as appears above, was on the Applicant’s case not paid in full);[30]
i)there were further discussions on 30 April 2007 but no resolution was reached, and the Applicant determined to take legal action;[31]
j)the Applicant decided to file in the WAIRC or the Magistrates Court of Western Australia in an endeavour to receive his full entitlement;[32]
k)the Applicant alleges that Mr Considine (presumably on behalf of the Respondent) “lied, deceived and misled Centrelink in the Separation Certificate to believe that it was … [the Applicant’s] fault” and that the Applicant “left the job voluntarily by stating that the money … kept is for … annual leave” in circumstances where no annual leave was payable under the contract;[33]
l)the Applicant asserts that the claims made by Mr Considine in relation to the Separation Certificate led to the Applicant not being paid any benefits for four months and to what he describes as “the problem still continuing in the admistrive appeal tribunal”;[34]
m)that when the matter went before the WAIRC the Respondent “pretended … that he is going to help me with the problem he caused me with Centrelink” but when the matter in the WAIRC was finalised the Respondent “wrote statement to Centrelink stating that it was my fault to leave the job … resurrecting the problem again.”[35]
[26] Applicant’s First Affidavit, para. 14.
[27] Applicant’s First Affidavit, para. 15.
[28] Applicant’s First Affidavit, paras. 16-17.
[29] Applicant’s First Affidavit, paras. 18-19.
[30] Applicant’s First Affidavit, para. 20.
[31] Applicant’s First Affidavit, paras. 20-24.
[32] Applicant’s First Affidavit, para. 25.
[33] Applicant’s First Affidavit, para. 27.
[34] Applicant’s First Affidavit, para. 28, with the quoted text transcribed without alteration from the Applicant’s First Affidavit.
[35] Applicant’s First Affidavit, para. 29.
From the foregoing it would appear that the misleading and deceptive conduct alleged by the Applicant is:
a)representations in relation to the calculation of the payment of superannuation entitlements and taxation deductions from the hourly rate of $40;
b)misleading Centrelink as to the reason for the Applicant leaving his engagement with the Respondent; and
c)pretending to the WAIRC that the Respondent would assist the Applicant with resolving the issue that the Applicant alleges the Respondent caused in relation to Centrelink.
The Respondent says that the alleged representations in relation to the hourly rate of payment go to the calculation of the correct rate of payment, and are therefore internal communications, which do not go to the formation, modification or termination of the relevant contractual relationship, and cannot therefore be characterised as conduct “in trade or commerce”. It matters not that the Respondent asserts that the contractual relationship is one of employment, whereas the Applicant asserts that it is one of principal and contractor, because the operative legal principle will apply in the same manner.[36]
[36] Nagy v Masters Dairy Ltd (1996) 150 ALR 273 at 294-295 per RD Nicholson J (“Nagy”).
In Concrete Construction (NSW) Pty Ltd v Nelson[37] a construction worker alleged that a foreman’s untrue statement that air conditioning shaft entry grates were secured by certain bolts where one of the grates gave way and caused the construction worker to fall to the bottom of the shaft and to suffer serious injuries was conduct which was misleading or deceptive or liable to mislead or deceive contrary to s.52 of the TP Act. The High Court of Australia held that the alleged conduct was not in trade or commerce. In so doing the High Court observed that:
“s.52 was not intended to extend to all conduct, regardless of its nature, in which a corporation might engage in the course of, or for the purposes of, its overall trading or commercial business. Put differently, the section was not intended to impose, by a side wind, an overlay of Commonwealth law upon every field of legislative control into which a corporation might stray for the purposes of, or in connection with, carrying on its trading or commercial activities. What the section is concerned with is the conduct of a corporation towards persons, be they consumers or not, with whom it (or those whose interests it represents or is seeking to promote) has or may have dealings in the course of those activities or transactions which, of their nature, bear a trading or commercial character.”[38]
[37] (1990) 169 CLR 594 (“Concrete Constructions”).
[38] Concrete Constructions at 603-604 per Mason CJ, Deane, Dawson and Gaudron JJ.
The High Court acknowledged that:
“In some areas, the dividing line between what is and what is not conduct ‘in trade or commerce’ may be less clear and may require the identification of what imports a trading or commercial character to an activity which is not, without more, of that character.”[39]
[39] Concrete Constructions at 604 per Mason CJ, Deane, Dawson and Gaudron JJ.
With respect to misleading statements by one employee of a corporation to another employee of a corporation the High Court said:
“The giving of a misleading hand signal by the driver of one of its trucks is not, in the relevant sense, conduct by a corporation ‘in trade or commerce’. Nor, without more, is a misleading statement by one of a building company’s own employees to another employee in the course of their ordinary activities. The position might well be different if the misleading statement was made in the course of, or for the purposes of, some trading or commercial dealing between the corporation and the particular employee.
The alleged misleading or deceptive conduct of the Company’s foreman in the present case consisted of an internal communication by one employee to another employee in the course of their ordinary activities in and about the construction of a building. It follows from what has been said above that that conduct was not, for relevant purposes, conduct ‘in trade or commerce, and would not, if established, constitute a contravention of s.52 of the Act.”[40]
[40] Concrete Constructions at 604-605 per Mason CJ, Deane, Dawson and Gaudron JJ.
The High Court’s judgment in Concrete Constructions has led to divergent views being expressed by the Federal Court of Australia with respect to whether particular activities, and especially negotiations in relation to contracts of employment, including variations of those contracts, are or are not internal communications, and even if they are, whether they are or are not in trade or commerce. The difficulties are summarised in the judgment of the Full Court of the Federal Court of Australia in Village Building Company Ltd v Canberra International Airport Pty Ltd[41] where the Full Court said:
“The difficulty that can arise in applying the principles in Concrete Constructions is illustrated by the different views expressed in this Court as to whether representations made by a corporation to an employee in connection with the employee’s terms of employment constitute conduct in trade or commerce. In Barto v GPR Management, in the context of a strike out application, Wilcox J held (at 395) negotiations with a prospective or present employee in respect of that person’s employment contact is conduct capable of falling within s 52 of the TP Act. In Martin v Tasmania Development and Resources [1999] FCA 593; (1999) 163 ALR 79, at 96-98 [70]-[77], Heerey J disagreed, holding that a communication to an employee asserting that termination of his employment was required on operational grounds was not a dealing of a trading or commercial nature. (This issue was not addressed on appeal: Tasmania Development and Resources v Martin [2000] FCA 414.) In Stoelwinder v Southern Health Care Network [2000] FCA 444; (2000) 177 ALR 501, Finkelstein J preferred Barto to Martin. In Hearn v O’Rourke [2002] FCA 1179; (2002) 193 ALR 264, a case involving a different fact situation, Kiefel J at first instance expressed a preference for the reasoning in Martin. The Full Court allowed an appeal (Finn and Jacobson JJ; Dowsett J dissenting), but did not find it necessary to resolve the conflict: Hearn v O’Rourke [2003] FCAFC 78; (2003) 129 FCR 64”[42]
[41] (2004) 139 FCR 330; [2004] FCAFC 240 (“Village Building”).
[42] Village Building FCR at 340-341 per French, Sackville and Conti JJ; FCAFC at para. 49 per French, Sackville and Conti JJ.
Whilst generally a contract for services is in the Court’s view likely to be more inherently commercial in character than a contract of employment, the same issues that arise with respect to internal communications in relation to a contract of employment arise with respect to labour only contracts for service, which, on the Applicant’s case, was the nature of the contract here. [43]
[43] But see Nagy at 294-295 per RD Nicholson J where it was said that dealings leading to the finalisation of a contract between a principal and independent contractor was, in trade or commerce, and analogous to contractual negotiations between an employer and employee.
The policy reasons behind the judgment in Concrete Constructions were highlighted in Barto v GPR Management Services Pty Ltd & Anor[44] where the Federal Court said:
“It is easy to understand the policy reasons underlying Concrete Constructions. A contrary result would have led to s.52 being used as a vehicle for the recovery of personal injury damages in a large number of industrial and motor accident cases; even cases where the respondent was not negligent, but only if it happened to be a “corporation” as defined in s.4 of the Trade Practices Act.”[45]
[44] (1991) 33 FCR 389; (1991) 105 ALR 339 (“Barto”).
[45] Barto FCR at 393 per Wilcox J; ALR at 343 per Wilcox J.
The observations made by the Federal Court in Johnson Tiles Pty Ltd & Ors v Esso Australia Pty Ltd & Anor[46] must also be borne in mind:
“Conduct may be misleading or deceptive because it involves an express representation which is false. … It does require a capacity to mislead or deceive attributable to the conduct in question. There must be a logical causal connection between the conduct and some hypothesised error. But not every case involving a logical connection between conduct and alleged error will result in the conduct being regarded as misleading or deceptive for the purposes of s 52. There is an evaluative judgment involved. As the Full Court said in SAP Australia Pty Ltd v Sapient Australia Pty Ltd (1999) 169 ALR 1 at 14:
‘The characterisation of conduct as "misleading or deceptive or likely to mislead or deceive" involves a judgment of a notional cause and effect relationship between the conduct and the putative consumer's state of mind. Implicit in that judgment is a selection process which can reject some causal connections, which, although theoretically open, are too tenuous or impose responsibility otherwise than in accordance with the policy of the legislation.’”[47]
[46] (2000) 104 FCR 564; [2000] FCA 1572 (“Johnson Tiles”).
[47] Johnson Tiles FCR at 590 per French J; FCA at para. 64 per French J.
In this case the dispute is about the manner and form, essentially the calculation, of payment to the Applicant of superannuation entitlements and deductions for taxation. There is no conduct alleged which can be characterised as the negotiation of the terms of the contract for services between the Applicant and Respondent, or its variation. In Boase v Seven Network (Operations Ltd) a s.52 claim was struck out because the alleged representations were not alleged to have effected any variation in the plaintiff’s contract of employment.[48] The dispute is simply one about the manner and form of payment, and whether the Applicant has been paid what he was contracted to be paid or entitled to be paid having regard to his entitlement to superannuation and the obligation to deduct taxation. That conduct, which relates to the implementation of the contract, cannot be characterised as bearing a trading or commercial character, and, is therefore, not in trade or commerce.[49] Even if it can be said to be in trade or commerce on a theoretical or very broad view of s.52 of the TP Act it is the Court’s view that a dispute of this nature is not such as to impose responsibility or liability in accordance with the policy underlying s.52 of the TP Act. If the circumstances of this case fell within the ambit of s.52 of the TP Act there would be very little that would fall without that ambit. To find that the conduct here was in trade or commerce would be to invite the application of s.52 of the TP Act to all manner of disputes concerning payment, underpayment or non-payment, of entitlements under contracts (both of services (employment) or for services (principal and contractor)) which are in reality nothing more than ordinary contractual disputes for which ordinary contractual remedies, and sometimes statutory remedies, are available.[50]
[48] [2004] WASC 245 at para. 40 per Newnes M.
[49] C. Lockhart, The Law of Misleading or Deceptive Conduct (Second Edn) (Chatswood: Lexis Nexis Butterworths, 2003), p.52, para. 2.31.
[50] Duncan v Lipscombe Child Care Services Inc (2006) 150 IR 471 at 479 per Heerey J; [2006] FCA 458 at para. 37 per Heerey J.
For the above reasons the alleged representations in relation to the payment and calculation of superannuation entitlements and taxation deductions from the hourly rate of $40 are not representations which would, in the event that they were made out, be conduct in trade or commerce.
Although the specific terms of the matters before the WAIRC and Centrelink are not set out in the Applicant’s First Affidavit, and no mention has been made of the relevant legislation in relation to those matters, it cannot but be the case that those matters related to remedies being sought by the Applicant under the relevant legislation governing those statutory bodies. As such any representations made by the Respondent were made in relation to legislative remedies being pursued by the Applicant. Whilst the alleged representations might have been made in the course of trade or commerce in a very general or broad sense (that is, a non s.52 sense) they were not conduct or representations bearing a trading or commercial character. For that reason they were not made “in trade or commerce”.[51]
[51] Concrete Constructions at 604 per Mason CJ, Deane, Dawson and Gaudron JJ; Glueck v Stang (2008) 76 IPR 75 at 79-80 per Lindgren J; [2008] FCA 148 at paras. 32-33 per Lindgren J; Interpharma Pty Ltd v Commissioner of Patents [2008] FCA 1283 at paras. 12-14 per Sundberg J.
Conclusion – in trade or commerce
The conduct alleged by the Applicant was not conduct in trade or commerce.
Conclusions
The Applicant’s Application in a Case will be dismissed as there is no arguable case because:
a)the Respondent is not a corporation;
b)the conduct alleged was not in trade or commerce; and
c)the Applicant cannot therefore establish a claim of misleading and deceptive conduct under s.52 of the TP Act.
The Court will hear the parties as to costs.
I certify that the preceding fifty (50) paragraphs are a true copy of the reasons for judgment of Lucev FM
Associate: S. Gough
Date: 29 August 2008
[6] [2008] FMCA 521 at para. 19 per Lucev FM.
4
27
4