Merman Pty Ltd v Cockburn Cement Ltd
[1988] FCA 617
•14 Oct 1988
I p i i -*
! JUDGMENT No. .. 0.7F ... .. .... ........ ..-" dv
C A T C H W O R D S
TRADE PRACTICES ACT - misleading and deceptive conduct -
application to strike out statement of claim - representations made in request to Australian Customs Service to initiate "dumping" inquiry - scope of s.52 - is it necessary that
conduct be likely to mislead or deceive consumers - scope of
phrase "in trade or commerce" - PRACTICE AND PROCEDURE - application to strike out statement of claim - applicable principles - application to stay proceedings in public interest - futility of proceedings -
implied review of administrative action - circumstances in which
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such application will be granted.
Trade Practices Act 1974 ss.45, 52, 53, 80, 8 7 , sub-s.51(1), para.80(l)(c)
Customs Tariff (Anti-Dumping) Act 1975 SS.~A, 5 , SA, 8, sub-ss.5A(l), 8(1), 8(3), 8(4), para.8(2A)(a)
Phelps v. Western Mining Corp. Ltd. (1978) Hanimex Pty. Ltd. v. Kodak (Australasia) Pty. Ltd. (1982) A.T.P.R. 30 - 287
Industrial Equity Ltd. v. North Broken Hill Holdings Ltd. (1986)
64 A.L.R. 292 Hornsby Building Information Centre Pty. Ltd. v. Sydney Buildinq
Information Centre Ltd. (1978) 140 C . L . R . 216
F- v. Federal Court of Australia; Ex parte Pilkington A.C.I. Operations) Pty. Ltd. (1978) 142 C.L.R. 113
Taco Company of Australia Inc. v. Taco Bell Pty. Ltd. (1982) 42 . _ _ _ _
A.L.R. 1 1 1 Parkdale Custom Built Furniture Pty. Ltd. v. 149 C.L.R. 191 Universal Telecasters (Queensland) Ltd. v.
Industries Ltd. L19831 A.T.P.R. 40 - 384
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2.
n
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S - Pty..Ltd. (1987) 77 A.L.R. 133
Re Ku-ring-gai Co-operative Building Society (No. 12) Ltd. (1978) 22 A.L.R. 621
W. & A. McArthur Limited v. The State of Queensland (1920) 28
C.L.R. 530
Bank of New South Wales v. The Commonwealth (1948) 76 C.L.R. 1Glorie v. W.A. Chip and Pulp Pty. Ltd. (1981) 39 A.L.R. 67
- Brown v. Riverstone Meat Co. Pty. Ltd. (1985) 60 A.L.R. 595 :.
~ e y v. Vic (1949) 78 C.L.R. 62
sioner St General f o r Railways 7N.S.W.) (1964) 112 C.L.R. 125
Liverpool and London and Globe Insurance Co. Ltd. v. J.W. Deaves (1971) 2 N.S.W.L.R. 131
%h++Beroya.Pty. Ltd. (1967) 92 W.N. (N.S.W.) 24
Taylor v. The Mlnlster (1973) 1 N.S.W.L.R. 352 Forster v. Jododex Australia Pty. Ltd. (1972) 127 C.L.R. 421 -v. Federal Comrnlssioner of Taxation (1980) 42 F.L.R. 6 Oceanlc Sun Line Special Shipping Co. Inc. v. Fay (1988) 79 A.L.R.
9
MERMAN PTY LTD v. COCKBURN CEMENT LTD and SWAN PORTLAND CEMENT LTD
NO. WAG 52 OF 1988LEE J. PERTH 14 OCTOBER 1988
! IN THE FEDERAL COURT ) OF AUSTRALIA )
WESTERN AUSTRALIA 1 DISTRICT REGISTRY 1
GENERAL DIVISION 1 No. WAG 52 of 1988
B E T W E E N : MERMAN PTY LTD
Applicantand
COCKBURN CEMENT LTDFirst Respondent
and
SWAN PORTLAND CEMENT LTD
Second Respondent I-.
i MINUTE OF ORDER JUDGE MAKING ORDER: LEE J.
DATE OF ORDER: 14 OCTOBER 1988
WHERE 1-lADE : PERTH THE COURT ORDERS THAT:
1. The first respondent's motion be dismissed. 2. The first respondent pay the applicant's costs of the motion.
Note: Settlement and entry of orders is dealt with
in Order 36 of the Federal Court Rules.
IN THE FEDERAL COURT OF AUSTRALIA i WESTERN AUSTRALIA DISTRICT REGISTRY GENERAL DIVISION
NO. WAG 52 of 1988
B E T W E E N : MERMAN PTY LTD
Applicantand
COCKBURN CEI-IENT LTDFirst Respondent
and
. -,
SWAN PORTLAND CEMENT LTD
Second Respondent
i ' L,' . .
CORAM: LEE J.
DATE : 14 OCTOBER 1988
REASONS FOR JUDGMENT
This is a motion by the first respondent seeking an
order striking out the statement of claim or alternatively staying any further proceedings in this matter. The motion involves
consideration of the scope of operation of s.52 of the Trade Practices Act 1974.
The applicant and respondents are each engaged in the : .:
production of portland cement ("cement") in the State of Western i. -
Australia. The respondents are cement producers of longstanding. The applicant began producing cement in about April 1987.
.. :
! L . I The respondents produce cement from cement clinker of their own manufacture. The applicant produces
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cement from clinker
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imported from Korea.
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On 24 December 1987 the respondents lodged a joint
submission with the Australian Customs Service seeking the imposition of "counter measures" pursuant to the Customs Tariff
(Anti-Dumping) Act 1975 in respect of the clinker imported by the applicant for the manufacture of its cement.
!
In March 1988 the applicant commenced proceedings '. .
seeking a declaration that certain statements made by the
respondents in the submission lodged with the Australian Customs Service was conduct in breach of s.52 of the Trade Practices Act
1974 in that the conduct of the respondents occurred in trade or
commerce and was misleading or deceptive or likely to mislead or
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deceive.
The first respondent contends that the application in
this matter discloses no cause of action against the respondents
in that the statements complained of are incapable of being conduct to which s.52 applies because they have no capacity to
mislead or deceive members of the public as consumers. The
respondent further contends that the conduct relied upon by the applicant was not conduct in trade or commerce. In that regard it
argued that a request to the Minister for Industry, Technology and
Commerce ("the Minister") to exercise statutory powers was not a business activity nor activity carried out in a business context capable of stamping such conduct with the character of conduct in trade or commerce. The first respondent argued that the proceedings should
be stayed because prosecution of the application could interfere
with the progress of an inquiry conducted on behalf of the
Minister under the Customs Tariff (Anti-Dumping) Act 1975,
initiated as a result of the respondents' joint submission to the Australian Customs Service. The first respondent contended that
any such interference would be prejudicial to the public interest.
submitted conducted by the Minister would render that the wide-ranging inquiry being
It was also
futile any declaration that ! >. I 1~
may be made by the Court on the application. Furthermore, if
there were a real prospect that the Court would refrain from
I exercising
its proceedings should be stayed forthwith.
discretion
to
grant
the
declaration
sought,
the
I I I The first respondent also argued that the purpose of the applicant's application was to obtain inspection of documents that
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I would otherwise be protected as confidential documents of the ~ first respondent in the conduct of the inquiry. CUSTOMS TARIFF (ANTI-DUMPING) ACT 1975
Before dealing with the first respondent's arguments it l ' I.
is necessary to examine the provisions of the Customs Tariff .
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(Anti-Dumping) Act 1975 ("the Act") as it stood at the time of the application.
j
Pursuant to sub-s.8( 3 ) of the Act, dumping duty was chargeable on goods to which the
Act applied. Pursuant
to
sub-s.8(1), the Act applied to goods that were the subject of a declaration made by the Minister when the Minister was satisfied
I
that such goods had been exported to Australia at an export price that was less than the normal value of those goods and that by
reason of the exportation at that price material injury to an ,
Australian industry had been caused, or was threatened.
Pursuant to sub-s.8(4) of the Act the amount of dumping
duty that could be imposed on goods was the sum equal to the I -
amount by which the export price was less than the normal value of those goods.
Section 4A of the Act set out the manner in which the
export price was to be determined for the purpose of s.8. In
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general terms the export price was the price paid by the importer
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less such part of the price that represented a charge in respect I .I
of transport of the goods after exportation or in respect of any other matter arising after exportation.
The normal value of goods was to be calculated according
to the criteria set out in s.5 of the Act. Such a value would
usually be the domestic price pald for such goods in the country
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of export but it may have been a price assessed by the
Comptroller-General of Customs ("the Comptroller") if he were satisfied that there was no true domestic market price for the
goods.
In determining whether material injury had been caused
I I
or was threatened to
an Australian industry under s . 8 , the
I I Minister had the assistance of the provisions of s.5A of the Act I i which allowed him to have regard to the various criteria set out
in sub-s.5A(l). Section SA, however, did not define "material
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I injury" and the matters to which it referred were only aids in I . . I arriving at a conclusion or determination as to whether material ! i
injury had been caused or was threatened according to the ordinary I meaning of those words. ! i
Before the Hinister could make a declaration that s .8 . - ' applied to any imported goods, he had to be satisfied that the
difference between the normal value and the export price of those
goods was the cause of material injury to an Australian industry.
An "Australian industry" was not defined but sub-s.5A(l) indicated
that the industry under consideration would be one which produced
or manufactured goods of the kind imported, or "like goods". "Like goods" were not defined in the Act.
It was not enough for the Minister to be satisfied that
an Australian industry was suffering injury because of loss of sales to imported goods of the same kind being sold at a lower
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price. It was necessary for the Minister to be satisfied that
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I there was a differential in price between the domestic price of i those goods in the exporting country and the export price charged
to the importer for those goods and that such a difference in I-
price had been the cause of material injury to an Australian
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I
industry. It would follow that such a differential would need to : ' be substantial before a Minister could be satisfied that such a difference between domestic and export price was the cause of
I material injury. ! i !
! In other words it would not be enough to show that goods may be imported at a price that was substantially less than the
price on the Australian market of like goods produced by an
Australian industry. It must be shown that the export price of
!
the imported goods was in truth an artificial price amounting to a dumping of goods and that the extent of the dumping was the reason
I for detriment being suffered in an Australian industry. l There was no provision in the Act for the lodging of complaints of dumping or requests for the imposition of dumping i I L administrative practice that representatives of Australian
duties by an Australian industry but it appears as a matter of
!
industry made submissions or complaints of dumping by completing a
questionnaire prepared by the Australian Customs Service.
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l .
e
There was no indlcation in the the Minister may have received or relied upon in determining
Act as to what material
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whether or not he was satisfied that s .8 should apply to any
l goods. Section 269V of the Customs Act 1901 provided that the
Hinister was not required to have regard to information, submissions or requests made to him in relation to the exercise of
his powers under the Act in relation to goods of a particular kind unless the information, submission or request was in writing and
was verified by statutory declaration. The 13inister was not enjoined, however, from having regard to informal and unverified
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submissions, requests or information.
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The Act did not refer to or adopt the provisions
of any
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international treaty to which Australia was a signatory.
'. .
Trading in goods at dumped prices is a matter of
international concern because of the barriers to trade that may result from reactive measures taken by governments of countries
with industries materially affected by the importation of dumped
goods. The international concern with the dumping of goods is
expressed in Art.VI of the General Agreement on Tariffs and Trade ("GATT") to which Australia became a signatory in 1948.
In 1968, the provisions of Art.VI of GATT were further
developed by the preparation of the Agreement On Implementation of
I.
Art.VI of GATT described as "the Anti-Dumping Code" to which
Australia also became a signatory. The Anti-Dumping Code was c,. ..
wholly revised by a further Agreement On Implementation of Art.VI of GATT in 1979. Australia became a signatory to that Agreement
. _ .
on 21 September 1982 and it became operative for Australia's purposes on 21 October 1982. The recitals to the Anti-Dumping Code recognise that the
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dumping unjustifiable impediment to international trade and such duties duties should not constitute an imposition of
may be applied against dumping only if such dumping causes or . .J
threatens material injury to an established industry. It is against this background that the nature of the
respondents' activities must be assessed to determine whether such activities were conduct in trade or commerce.
activities were conduct within the meaning of s.52 of the Trade
..
statement of claim
representations allegedly made by the respondents in their written
request for the initiation of an investigation of the alleged
importation of dumped goods by the applicant.identifies eight separate The
Two of the alleged representations relate directly to
two of the three elements in respect of which the Iulinister was
required to be satisfied before he made a declaration under
sub-s.8(1) of the Act. . .
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The first of these 1 s an alleged representation by the respondents as to the export prlce of the clinker supplied to the
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i Korea. applicant from There are no complaints as to any i i
i representation by the respondents as to the normal value of such
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I clinker in the domestic market in Korea. . . I
The second is a representation as to the impact of the
applicant's trade in the local market, in particular upon the ',: trade previously en~oyed by the respondents in the State of -
Western Australia, from which representation it may have been
I .
intended by the respondents that some inference of materlal injury
to an Australian industry be drawn by the Minister.
In the absence of any other guidelines in the Act it may
have been possible for the Minister to treat such representations
as part of the evidence to be relied upon to establish the required elements. TRADE PRACTICES ACT 1974 s.52
Section 52 reads as follows:
"(1) A corporation shall not, in trade or commerce, engage in conduct that is misleading or
deceptive or is likely to mislead or deceive.
(2) Nothing in the succeeding provisions of this
Division shall be taken as limiting by implication the generality of sub-section (l)."
It has been said on several previous occasions that the
proper construction of some sections of the Trade Practices Act 1974 remains unresolved and in particular that the boundaries of l.
' .S the territory within which s.52 operates have not been finally
t
drawn. (See Hanimex Pty. Ltd. v. Kodak (Australasia) Pty. Ltd.
(1982) A.T.P.R. 40 - 287 at p.43,599; Industrial Equity Ltd. v. North Broken Hill Holdings Ltd. (1986) 64 A.L.R. 292 at 303.) To understand the first respondent's submission that the
statement of claim should be struck out as disclosing no
I reasonable cause of action pursuant to the provisions of s.52 of the Trades Practices Act 1974, it is necessary to review the
history of the construction of that section as to the meaning of the expression "conduct in trade or commerce".
...
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"Consumers"
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In Sydney Building Information Centre Ltd.
Hornsby Building Information Centre Pty. Ltd.
v.
(1978) 140 C.L.R. 216 it
was argued that s.52 did not extend to protect the interests of
traders and was only concerned with the protection of consumers.
It was argued that the heading "Consumer Protection" to Pt.V of the Trade Practices Act 1974, in which s.52 is located, limited
the meaning of s.52.
The principal judgment of the High Court was delivered
i
by Stephen J. with whom Jacobs 3 . agreed as did Barwick CJ., in so t I-
far as the reasons expressed by Stephen J. supported the shortly I ' ?. stated conclusions of the Chief Justice.
Stephen J. noted that s.52 was expressed in wide terms
and concluded that it was especially inappropriate for the general I / ..
words of s.52 to be subject to some limitation derived from the heading to Pt.V although it did colour the meaning to
L~
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be given to L : I...
the sort of conduct against which the section was aimed. The
section was not concerned as such with any unfairness of .. , - competition in trade as between two traders, but if there were conduct occurring in trade or commerce that was misleading or
deceptive, an applicant who alleged a breach of s.52 and sought
,.I
relief under the Trade Practices Act 1974 would not be prevented ,. from obtaining that relief because it had no consumers of its i '
services or had initiated the proceedings for the protection of its own interests and not those of consumers.
l
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At pp.226-227 Stephen 3 . said:
"The Sydney Centre will, however, only be entitled
to relief if what is in question is truly a
contravention of s.52(1); that is to say, is r
conduct which is misleading or deceptive. It is only this with which s.52(1) is at all concerned. It is not concerned, as such, with any unfairness
of competition in trade as between two traders.
The section is said to have been modelled on s . 5
of the United States Federal Trade Commission Act (15 u.S.C. 45) but is significantly different both in form and in origin. The United-States section, when first enacted in 1914, was exclusively concerned with 'unfair methods of competition in commerce' and only in 1938, when amended so as to strike at 'unfair or deceptive acts or practices
in commerce', did it for the first time also embrace within its scope the subject of consumer
protection ( 5 5 Am. J u r . 2d par. 736). Section 52
of our Act is on the contrary exclusively
concerned with consumer protection. It says
nothing about unfair acts or practices but devotes
itself to the prohibition of conduct which misleads or deceives."
At p.220 Barwick CJ. stated that it was his conclusion
that:
"Section 52 is concerned with conduct which is
deceptive of members of the public in their .. . . .
not concerned merely with the protection of the capacity as consumers of goods o r services: it is reputation o r goodwill of competitors in trade or
commerce."Aickin 3 . agreed with the reasons of Barwick C.3.
l i : $ ' murphy J. stated that s.52 is not limited or qualified
by the heading "Consumer Protection" and that, furthermore, the
words "trade or commerce" were extremely wide. (p.234) In Reg. v. Federal Court of Australia; Ex parte
Pilkington A.C.I. (Operations) Pty. Ltd. (1978) 142 C.L.R. 113 it I .
was argued that the right to obtain an injunction pursuant to s.80 , -
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of the Trade Practices Act 1974 was limited to persons who were consumers and the section did not provide a right to relief for
trade competitors who were not consumers. The prosecutor, seeking a writ of prohibition in those proceedings, argued that Pt.V of the Trade Practices Act 1974 was concerned exclusively with the protection of consumers who alone were capable of being misled or
deceived or of being the victims of false or misleading representations or statements or of otherwise being the target of the sort of conduct at which Pt.V was aimed and, therefore, the
rights of injunctive relief afforded to any other person in
r
para.80(1) (c) of the Trade Practices Act 1974 went no further than consumers who could point to a breach of obligation owed to them and created by Pt.V.
Stephen J. (at p.120) noted that Pt.V extended
protection beyond those who were consumers. Furthermore, Pt.IV, to which s . 8 0 equally applied, was concerned with the conduct of
competitors and his Honour was not prepared to read down the terms of para.80(l)(c). . -
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Mason J. (at p.128) saw no Incongruity In making the provisions of Pt.V of the Trade Practices Act 1974 enforceable at
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the instance of a competitor who was not a consumer and recognized that to do so may provide the most effective sanction by which protection may be provided to consumers. Murphy J. reached a
similar conclusion and Aickin J. found it unnecessary to decide.
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It was clear corporations by enjoining such corporations from engaging in
that s.52 governed
the
conduct
of
conduct in trade or commerce that was misleading or deceptive but
whether s.52 only extended to such conduct as was capable of misleading or deceiving persons who were consumers, however widely
that term may be used, was undecided. It had been decided,
however, that persons who were not consumers may resort to
para.80(1) (c) of the Act as "any other person" to obtain the
benefit of such enforcement or remedy that may be provided by that section for a contraventlon of s.52.
In Taco Company of Australia Inc. v. Taco Bell Pty. Ltd.
(1982) 42 A.L.R. 177, the joint judgment of Deane and Fitzgerald JJ. gave some consideration
their Honours noted that it was a matter of debate as to whether to the scope of operation of s .52 and
the protection of rival traders was part of a legislative purpose to be discerned in s.52 but that if it were it was plain that the
primary legislative purpose s.52 was intended to serve was . .
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consumer pcotection (p.199). Furthermore, to be categorized as
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misleading or deceptive conduct within the meaning of s.52 the conduct had to be activity that contained or conveyed a misrepresentation:
l ' . . .whether or not conduct amounts to a
misrepresentation is a question of fact to be decided by considering what is said and done
against the background of all surrounding
':'
circumstances. In some cases, such as an express
untrue representation made only to identified !.. ,
individuals, the process of deciding that question
of fact may be direct and uncomplicated." (at
p.202) , I
Their Honours went on to say that where the suggested misrepresentation has not been expressly made and it is alleged that the relevant deception or misleading is of the public, (for
example, in the nature of an allegation of passing off), it would be necessary to identify the relevant section of the public by
reference to which the question of whether the conduct wasmisleading or deceptive fell to be tested.
Shortly after the decision in Taco Company, the High
Court again considered the operation of s.52 in Parkdale Custom Built Furniture Pty. Ltd. v. Puxu Pty. Ltd. (1982) 149 C.L.R. 191
In Parkdale the Court was considering alleged conduct
involving representations that were not express, which were made to the public at large and did not involve representations to
identified persons as distinguished in Taco Company by Deane and I - t - Fitzgerald JJ. ' :
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Gibbs CJ. noted that although words of s.52 were clear and unambiguous they were nevertheless
it had been said that
the
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productive of considerable difficulty. He saw no reason why the section so broadly expressed and drastic in its possible consequences should be beneficially construed. That is, without
suggesting that the words be given some unnaturally confined
meaning or be construed to conform with the common law, the words
should be given their plain and natural meaning and not be
understood in some loose or expanded sense (at pp.197-198). Mason J. confirmed that the general words of s.52 should
be widely interpreted without being read down by reference to the heading of Pt.V "Consumer Protection" or to the more specific succeeding sections. I4ason J. took up the comments of Stephen J.
in Hornsby (at p.226) - to the effect that s.52 was not concerned,
as such, with any unfairness of competition in trade as between two traders - and then added that it was not enough that conduct
damages a rival trader, it must mislead or deceive or be likely to mislead or deceive members of the public in their capacity as consumers (pp.202-203).
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Of course, that statement must the facts under consideration in that case, which required firstly
be read in the context
of
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the identification of a class of potential consumers as the measure against which the representation could be assessed for its
tendency to mislead and secondly the assessment of the capacity for mischief in that representation by reference to a reasonable member of that class.
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Mason J. further noted that the object of Pt.V was to protect consumers by eliminating unfair trade practices and the
words of s.52 were not to be read down so as to enable any policy ,' of freedom of competition between traders that may be enshrined in Pt.1~ to prevall over Pt.V (pp.204-205).
... , .
Brennan J. stated that conduct cannot fall within s.52 L..
unless a consumer would be likely to be misled or deceived by the
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conduct (p.225). Again, however, such comments must be read in the context of the facts of the case.
.
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In Universal Telecasters Consolidated Industries Ltd. 119831
(Queensland) Ltd. v. Ainsworth
A.T.P.R. 40-384 where it was
argued that the conduct complained of, the telecasting of a news
item, was incapable in law of misleading or deceiving viewers in
their capacity as consumers, it was held by the Full Court of this Court that the determination of the correctness of that submission
would require a determination as to whether judgments of the HighCourt in Hornsby and Parkdale applied to the circumstances of the
case in question but noted that proceedings in this Court had not
been restricted to the type of case suggested, namely, misleading or deceptive conduct directed at potential consumers. Atp.44,525
the joint judgment of the Full Court noted that statements contained in the judgments delivered in Hornsby and Parkdale to
the effect that s.52 was concerned with conduct which was deceptive to members of the public as consumers were statements to
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18.
be read in the context in which they were made and in particular
I
I it was to be noted that their Honours were differentiating between . . I, I I . .
I a contravention of s.52 of the Trade Practices Act 1974 and the I I
tort of passing off. The Full Court drew a distinction between the commercial activity of telecasting material to be viewed by the public on television sets against the commercial activity of involvement in a market for the sale of goods and services. The
_ ,
Full Court referred to Phelps v. Western Mining Corp. Ltd. (1978) . . 20 A.L.R. 183 as an example of the type of case that went beyond
the restrictions contended for. In that case the applicant, a member of the public, was able to pursue restraint of conduct alleged to constitute a breach of s.52, namely, the publication of advertisements on the subject of uranium mining, nuclear power and
energy needs which were alleged to be likely to mislead or
deceive, but in respect of which no section of the public as potential consumers had been identified. The application of s.52 to express representations to
identified individuals as enunciated by Deane and Fitzgerald JJ.
in Taco Company has been the foundation of a stream of cases which
do not involve statements directed to the public or any
identifiable section of it. (See comments of Toohey J. in Menhaden Pty. Ltd. v. Citibank NA (1984) 55 A.L.R. 709, at p.714.)
That stream of cases was acknowledged by the Full Court
of this Court in Bevanere Pty. Ltd. v. Lubidineuse (1985) 59
A.L.R. 334 where after considering the decision of the High Court in Hornsby the Court stated: i
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1 i "It is true that conduct falling within S 52 , . frequently occurs when statements are made by a
corporation to members of the public, but...it
does not follow that S 52 is confined to
statements directed to the public or some identifiable section of It." (p.341)
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The essential element in that line of cases involves
identification of actions by a corporation in the course of trade or commerce which involve representations that may amount to l misleading or deceptive conduct. In such cases it is the absence
of characterization of the conduct of the corporation as conduct
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in trade or commerce and not the absence of direction of the conduct to members of the public in their capacity as consumers of
goods and services that will cause the conduct to fall outside
s.52. (See O'Brien v. Smolonogov (1983) 5 3 A.L.R. 107.) In that
case representations made by individuals by telephone, being persons to whom the provisions of s.52 were extended by s.6 of the Trade Practices Act 1974, did not constitute a contravention of
s.52 in that those persons were not engaged in any activity that
could be categorized in any way as the carrying-on of a business.
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The transaction conducted totally lacked a trading or commercial I
character.
Accordingly, a statement negotiations for employment conducted between
made
in
the course of
a corporate employer
and prospective employee will constitute conduct in trade or commerce on the part of a trading corporation. (See Patrick v. Steel Mains Pty. Ltd. (1987) 77 A.L.R. 133.)
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In Bevanere the Full Court said as follows: "It was also submitted on behalf of the appellant
that, even if its conduct was 'in trade or
commerce' according to the ordinary meaning of
those words, it was not conduct to which s.52
applied since the section is directed only to conduct which is deceptive of members of the
public in their capacity as consumers of goods and services. It was argued that the private nature of the transaction in question put it beyond the ambit of 5.52.
We reject this argument as we are unable to discern in the context any sufficient reason to
warrant giving the expression 'in trade or
commerce' a more limited or restricted meaning than that expression ordinarily bears.'' (p.341)
The Trade Practices Act 1974 is an Act relating to
certain trade practices. Whether the Act frees competition
I
between traders by removing restrictive trade practices or
improves the lot of consumers by eliminating unfair trading practices, the overall object of the legislation is to remove ' : L
undesirable practices in trade or commerce. Naturally consumers,
either directly or indirectly, will be the ultimate beneficiaries , .
of such a leglslative purpose but to import into s.52 the limitation of the operation of that section to conduct that is deceptive of members of the public in their capacity as consumers
of goods and services is in truth to read down the section by reference to the heading "Pt.V - Consumer Protection". It should be noted that that heading is followed by the sub-heading
"Division I - Unfair Practices" in keeping with the overall thrust of the Trade Practices Act 1974
l 21. I i
In Wright v. TNT Australia Pty. Ltd. (1988) 80 A.L.R.
1:
221, Lee J. of the Supreme Court of New South Wales, reviewed the decisions of the High Court in Hornsby and Parkdale and concluded that s.52 is designed to operate within a defined context and that
context was f o r the protection of consumers:
I
"The consumer to whom the section is directed to
protect is thus readily recognisable: he is a
consumer to whom goods o r services are supplied in trade or commerce by a supplier. The 'services'
which a consumer may have supplied to him are, of
course, as diverse as there are trades and businesses in trade and commerce." (p.230)
His Honour was unable to agree with the decision of
l
Wilcox J. in Patrick where it had been held that statements made
in negotiations in respect of future employment were capable of being conduct in trade o r commerce within the meaning of s.52.
I
His Honour was not referred to the decision of the Full
1
Court of this Court in Bevanere.
In Finucane v. New South Wales Egg Corporation (1988)
A.T.P.R. 40-863, Lockhart J. concluded that activities of a corporation in and about the conduct of interviews with a
i prospective employee fell within the ambit of conduct in trade or
commerce as recited rn s.52 of the Trade Practices Act 1974.
!
His Honour referred to the various authorities that had
dealt with the construction of s.52 and also referred to the judgment of Lee J. in Wright and noted that his Honour had held
that s.52 was to be interpreted with reference to the meaning of
the word "consumer" in the context of consumer protection.
Lockhart J. noted that Lee J. had expressly differed from the
reasoning of Wilcox J. in Patrick and stated that to the extent to which Lee J. may have held that such conduct would be outside the
scope of s.52 whatever the scope of a corporation's activities in
and about the negotiation of employment or whatever the course of
I the corporation's business, he would be obliged to respectfully t I
differ from the learned judge. ( p . 4 9 , 3 3 8 ) I .; i '. t l . '
On this motion it is unnecessary for me to make any determination on the construction of
s.52 but for the reasons set
out above I would be obliged to conclude, if required, that a discernible line of authority has been established in this Court
! *
that is not consonant with the construction of 5.52 suggested in
l .J
Wright.
In summary, the operation of s.52 as construed in those
cases may be stated as follows:
(a) To be conduct on the part of a corporation
that is misleading or deceptive there must be activity that amounts to a misrepresentation;
(b)
if the misrepresentation is made expressly to I. identified an person as part of a corporation's activity in trade or commerce,
the conduct will fall within s.52; and :. , ,._ (c) if the conduct relied upon as constituting a
misrepresentation is not express in nature and is alleged to be a deception of the public it
will be necessary to identify consumers likely to be affected by the conduct although that class of consumers may be the public at large.
'.
i
"In Trade or Commerce"
, : I '
I . ..
As is stated by Toohey J. in Menhaden Pty. Ltd. v.
Citibank NA at p.712, the expression "in trade or commerce" has a
I. _.
wide meaning; it is an expression of fact and is a term of common knowledge. (See Re Ku-ring-gai Co-operative Building Society (No.
12) Ltd. (1978) 22 A.L.R. 621; W. & A. 1-IcArthur Limited. v. - The .. t.
State of Queensland (1920) 28 C.L.R. 530 at p.547; Bank of New South Wales v. The Commonwealth (1948) 76 C.L.R. 1 at pp.284 and
381. (See O'Brien v. Smolonogov at pp.110-111.)
As Morling J. said in Glorie v. W.A. Chip E, Pulp Co.
! Pty. Ltd. (1981) 39 A.L.R. 67 at 93:
"Given that a misleading or deceptive statement is
made by a corporation in trade or commerce, it is difficult to envisage that it is not caught by
S 52(1) of the Act. Any statement made in trade
or commerce will almost certainly be addressed,
directly or indirectly, to the market place, ie to consumers of one class or another."
I
!
24.
In Brown v. Riverstone meat Co. Pty. Ltd. (1985) 60
A.L.R. 595 Wilcox J. held that statements amounting to misrepresentations made by a meat exporting corporation to the Department of Primary Industry were capable of constituting
conduct in trade or commerce for the purpose of 5.53 of Pt.V of
the Trade Practices Act 1974. The same reasoning applied by his
Honour would be relevant to the provisions of s.52. It was argued .I I .
in that case that the representations made to the Department of I
Primary Industry were not made to a consumer or to a purchaser of food for resale to a consumer but to a government department
concerned only with the control of exports. Wilcox J. held that such a submission overlooked the fact that one purpose for which the Department of Primary Industry exercised export control was
for the protection of consumers but irrespective of that fact the
representations were made to the Department of Primary Industry for the purpose of obtaining export approval and the whole of that
conduct was undertaken in the course of trade or commerce and the matter fell squarely within the provisions of s.53 of the Trade Practices Act 1974.
i
The first respondent has argued that the respondent's submission to the Minister seeking the imposition
of dumping duty
on certain imports is not capable of being a business activity and that a suggestion to the Minister that he should exercise his
statutory powers cannot be regarded as activity in a business context. Furthermore, it was argued that a statement made to a statutory body such as a tribunal or inquiry or to a Minister
. 25.
could not be conduct within the meaning of s .52 in that it was not able to be relied upon by a consumer or able to affect existing
commercial relations between the representor and a representee.
!
The respondent's submission not so patently correct to show that the
may be arguable but it is
claim of the applicant is
clearly untenable and cannot succeed.
It may be equally argued that the plain words of s.52
provide a sufficient touchstone in the words "in trade or
commerce" to define the scope of the section. It may be argued that any potential impact upon a consumer, however indirect it may be. It
act in trade or commerce has
may be that conduct in trade or commerce, misleading or deceptive in nature but not directed to consumers is nonetheless conduct
aimed to
secure eventually impacts upon consumers.
some trade
or
commercial
advantage
which
The first respondent argued that if the operation of
s.52 were not limited in the manner contended it would "open the
L -
flood gates" and would permit judicial interference with the . . .. conduct of administrative functrons by tribunals and statutory officers. As Deane J. observed in Phelps v. Western Mining Corp. - Ltd. at p.189, the threat of opening the flood gates of litigation
I . '
to Parliament are to bear their ordinary meaning. the question whether the words used by
is irrelevant
The test of whether conduct has the characteristic of
activity in trade or commerce is not difficult to apply. For example, the issue of legal proceedings or the commencement of
I
arbitration proceedings would be acts that do not on their face bear the stamp of acts in trade or commerce and do not become so
merely because a person engaged in trade or commerce has resorted to their use. The question of whether a submission to the Minister
seeking the commencement of an inquiry or the imposition of customs duties are acts in trade or commerce may provide a
different answer. That conduct may bear the hallmark of conduct in trade or commerce irrespective of whether the Minister agrees
to conduct such an inquiry or to impose such duty. It may be I
I .
regarded as a step against competition seeking a definite 3 ' commercial result or seeking a result in terms of trade.
!-
c .
Furthermore, the interests by ministerial action if the Minister is misled or deceived by
of consumers may
be affected
representations made to him.
Some scope of operation of the Trade Practices
indication of Parliament's intention as to the
I
Act 1974 may be found in
sub-s.269U(9) of the Customs Act 1901.That sub-section is a
limiting provision as follows: i
L I .
"Nothing in this section shall be taken, for the
purposes of sub-section 5i(1) of the Trade Practices Act 1974, to authorize any act or thing other than the providing of information or the making of a submission, at a meeting of representatives of
an Australian industry convened in pursuance of sub-section ( 2 ) ,
by a representative of the Australian industry to the officer
convening the meeting in relation to the question being considered by the meeting." I .
I .
Section 51 of the Trade certain conduct from consideration
Practices Act 1974 excepts
as a contravention of a
provision of Pt.IV of the Act which deals with "Restrictive Trade Practices". Section 296U was inserted in the Customs Act 1901 as
part of Pt.XV B under the heading "Special Provisions Relating to Anti-Dumping Duties".
It Tariff (Anti-Dumping) Act 1975 which empowered the Minister to
was
concerned with para.8(2A)(a) of the Customs
issue a notice requiring an undertaking from an exporter of goods to Australia that the exporter will conduct its future export trade to Australia to avoid causing any material injury to an
I.
Australian industry. !
L ,
Section 269U established procedures that may be utilized
to obtain information or submissions from the relevant Australian
I 28. industry to assist the Minister to determine the terms of any such
I I
undertaking that may be required of an exporter in the event that
!
the Minister decides to issue such a notice. Pursuant to sub-ss.269U(l) and (2) the Comptroller may authorize a meeting of representatives
of a relevant industry to
be convened by an officer and under sub-s.269U(4) representatives
of the Australian industry may provide information or make
submissions at that meeting as to the terms of the undertaking the Minister should find satisfactory.
In addition to the delivery of submissions to such a meeting,
such information or
sub-s.269U(5) permitted a
representative of Australian industry who attends such a meeting, to provide information or make submissions in respect of the terms
of the undertaking to the officer convening the meeting otherwisethan at the meeting or to the Minlster.
Sub-section 269U(9) stipulated that only the providing of information or the making
of a submission by a representative
' -
of Australian industry at a meeting convened pursuant to !
sub-s.269U(2) may be regarded as an act specifically authorized by
:
the Customs Act 1901 for the purposes of sub-s.51(1) of the Trade . - I
L '
Practices Act 1974. Therefore, the acts of a representative of an Australian industry under sub-s.269U(5) of the Customs Act 1901
are not protected by sub-s.51(1) and a corporation making such submissions or providing such information could not rely on
~ 29.
i sub-s.51(1) of the Trade Practices Act 1974 to prevent such conduct being a breach of Pt.IV of the Trade Practices Act 1974.
i
Section 45 of that contravention of that section for a corporation to arrive at
Act is contained in
Pt.IV and it is
a
an , .
understanding that has the purpose or is likely to have the effect of substantially lessening competition.
It may be argued that if a corporation provides
.. .
information or makes a submission to the Minister under . I ...
sub-s.269U(5) as part of an understanding that corporation has
with another and the purpose of that understanding is to achieve a
higher import corporation as a representative of Australian industry could not
price
and
thereby
lessen
Competition,
that
look to sub-s.51(1) of the Trade Practices Act 1974 and
sub-s.269U(5) of the Customs Act 1901 to prevent such provision of information or delivery of a submission being treated as a contravention of the Trade Practices Act 1974 where other elements
necessary to establish such a contravention are able to be
I demonstrated.
In other words, if representatives of an Australian
industry make submissions or provide information outside a meeting
provided for that purpose under the Customs Act 1901 and do so as
L .
part of an understanding with each other which is likely to have I . i the effect of lessening competition, they may be in breach of s.45
of the Trade Practices Act 1974.
i
i
I
Viewed in this context, an argument that submissions to 'I .
the Minister or his officers under the Customs Tariff , -
(Anti-Dumping) Act 1975 may be within the provision of s.52 of the
Trade Practices Act 1974 as conduct in trade or commerce may take on greater strength. CONCLUSION
I
If the first respondent's application to strike out the statement of claim is to succeed it must
show a very clear case
to
>-.
justify intervention by the Court to prevent the applicant
presenting his case for determination in the ordinary way. It is
apparent that if a real question will arise for determination, the
Court is not competent to dismiss the action. (See ~ e y v.
Victorian Railways Commissioners (1949) 78 C.L.R. 62 per Dixon J.
at p.91.) It would be necessary for the first respondent to show that the applicant's case is so clearly untenable that it cannot possibly succeed. (General Steel Industries Inc. v. Commissioner
f o r Railways (N.S.W.) (1964) 112 C.L.R. 125 per Barwick CJ. at i p . 1 3 0 . )
The applicant's statement of claim does raise a real f 5' I* ,
question for determination as to the scope of s.52 of the Trade
Practices Act 1974 and the first respondent's motion to strike out the statement of claim must fail.
Alternatively, the first respondent has sought an order
that the proceedings of this matter be stayed in the public
interest. ! '
Firstly, it argues
application can be of no value to the parties for it will involve
a determination of whether certain limited representations are
capable of being misleading, the answer to which will be of littlethat the prosecution of the
moment. It is argued that the initiation of the dumping inquiry
,. . I
by the Minister has rendered irrelevant matters complained of by !
The determinations upon many matters to Minister's inquiry will make its own ' .
the applicant. which the representations
refer in part only. Furthermore, any determination by this Court as to the facts which may render the representation misleading
will not bind the Minister. !
These submissions may have some force but against them
must be weighed two other considerations.
Firstly, it may be a result of the applicant's case that the respondents' representations
as to export price and injury
to
an industry are found to be misleading and deceptive in that they
have been based on errors of fact. Such a finding may result in a
conclusion that there was insufficient material before the
Minister to allow him to be satisfied that the dumping of imports
was occurring or that there was a causal connection between any
~ * i I 3 2 . I
i dumping and injury to an industry, and that but for the I
I misrepresentation the Australian Customs Service may have
i refrained from
commencing international obligations undertaken under
an
inquiry
having
regard
the
to
1 .
rthe Anti-Dumping Code.
If such a conclusion did ensue the applicant may seek to recover from the respondents, under ss.82 and 87 of the Trade Practices Act 1974, such orders for relief as will compensate - for any loss
or damage suffered OK expense incurred by reason of the necessity for the applicant to participate in the inquiry which resulted
from the respondents' conduct.
Secondly, the applicant seeks an injunction under s.80
of the Trade Practices Act 1974 and such an application may involve an assessment of the public interest irrespective of the
interest of the applicant bringing the suit. (See Phelps v.
Western Mining Corp. Ltd. per Bowen CJ. at p.188.) After the
issues raised by the application have been considered and the
relevant findings of fact have been made, the Court may be of the view that it is in the public interest that any misstatements that
have led to the uncorrected and it is possible that the Court may order
initiation of such an inquiry should not
go
as part of
the injunctive relief that any misstatements made to the
Australian Customs Service be corrected if the Court is persuaded
that there is some risk that the statements, if uncorrected, may be relied upon for the formation of any view or opinion by the Minister or by officers of his department.
l
3 3 .
At this stage it cannot be stated with certainty that the objective of the proceeding
is futile. If that situation does
!
develop, no doubt appropriate applications may be made to the Court. The first respondent also argues that failure to stay the applicant's action will delay the
Minister's inquiry and will
!
amount to a review of the administrative acts of that inquiry. I I.
I am unable to accept that any element of review of I . ' i
administrative conduct is involved in a determination by this ! ! . Court upon the applicant's application. The applicant will either succeed or fail in showing that it is entitled to orders from this
Court arising out of breaches of the provisions of the Trade !
Practices Act 1974. The Court's task and obligation will be to determine whether there has been conduct in breach of that Act and whether such conduct requires orders to be made pursuant to the
powers provided by that Act. Such a proceeding is inherently I -. L ' different from cases where courts have declined to make the
findings or orders sought when specific tribunals have been
dedicated to that purpose. (See Liverpool & London & Globe
Insurance Co. Ltd. v. J.W. Deaves Pty. Ltd. (1971) 2 N.S.M. L.R. 131; Blank v. Beroya Pty. Ltd. (1967) 92 W.N. (N.S.W.) 24; Taylor i
v. The Minister (1973) 1 N.S.W.L.R. 352.)
Even in those cases other than from the limited perspective of the private interests
a court unable to look at
a matter
i '
I
,
of the litigants may nonetheless exercise a discretion to provide
I
I
l r '
I declaratory relief so that a matter in which the litigant has an 1 i I
interest is not finally determined otherwise than according to law
notwithstanding that the statute establishing the specific
I
i tribunal may have excluded any review of the tribunal by
prerogative writ. (See Forster v. Jododex Australia Pty. Ltd. (1972) 127 C.L.R. 421, 428 per Walsh J.; Dorney v. Federal
Commissioner of Taxation (1980) 42 F.L.R. 6.)
- .
The first respondent further submitted that the , . I proceedings should be stayed as an abuse of process in that the
object of the proceedings was to delay the anti-dumping inquiryand to obtain discovery of documents that had been submitted to
.
the Australian Customs Service in confidence and would not be made
available to the applicant by the Australian Customs Service in r I : the course of its inquiry.
I
To be able to conclude that there is an abuse of process i
. .I
of the Court it would be necessary for there to be some evidence
before the Court from which inferences as to lack o f bona fides on the part
of the applicant may be drawn. There is no such evidence
in this hearing and it would be difficult to conclude that the
proceedings have no true foundation if they contained a real
question for determination and sought orders that may be made in the public interest under the Trade Practices Act 1974.
I
l
i l
35.
If a real question is raised on the pleadings as to i
l .I 1,
whether there has been conduct in breach of s.52 of the Trade Practices Act 1974 by way of misleading or deceptive conduct, any
documents relevant to that issue must be discovered and made I. .
available for inspection in the ordinary way. The fact that this may lead to discovery of documents that may not otherwise be available for inspection by the applicant is irrelevant. ! The first respondent also argued that the application
would involve wastage of limited resources by involving this Court in determination of issues peripheral to the anti-dumping inquiry.
This argument can only be a re-statement of the argument in :
respect of futility of relief. If an application is properly
before the Court and it is not duplicated by proceedings in
another jurisdiction, there is no ability for the Court to stay the matter merely because it involves the use of the Court's
I-
limited resources without first finding the proceedings are an
abuse of process or vexatious. (See discussion by Deane J. in
Oceanic Sun Line Special Shipping Co. Inc. v. Fay (1988) 62 A.L.J.R. 389 at pp.413-414.)
..
Finally the first respondent seeks to have the proceedings stayed on the ground that the anti-dumping inquiry is
well under way and the applicant has delayed its commencement ofthe proceedings. The circumstances of this case would not justify
an order staying proceedings on the sole ground of delay in commencement of the application. A delay, if any, was not gross
! r, I
I 36. I F I and in any event, as is set out above, the applicant may seek relief in these proceedings by way of appropriate injunction to
! place corrected statements before the inquiry if it is continuing
or by way of an order for the payment of any losses or expenses incurred if the inquiry has been completed.
No doubt this Court may stay its own proceedings in
appropriate cases. (See Bond Corporation Pty. Ltd. v. Thiess
Contractors Pty. Ltd. (1987) 71 A.L.R. 125.) However, I am not
persuaded that at this stage of the proceedings it is appropriate to order such a stay and prevent the applicant from prosecuting its application.
Accordingly, the first dismissed with an order that it pay the applicant's costs.
respondent's
motion must
be
i
I
I <
I ! 37. I certify that the preceding
thirty six (36) pages are a true copy of the
Reasons for Judgment of his HonourJustice Lee.
. .
Associate:
Counsel for the Applicant: Mr 14. Bennett Solicitor for the Applicant: Messrs Keall Brinsden
Counsel for the First Respondent: Mr D. Stone
Solicitor for the First Respondent: Messrs Northmore, Hale, Davey and Leake
Counsel f o r the Second Respondent: M r J. Birman Solicitor for the Second Respondent: Messrs Birman and Ride
Dates of Hearing: 14 and 27 April 1988
Date of Judgment: 14 October 1988
l ' t
6
0
0