Murphy v State of Victoria (No 2)

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMERCIAL AND EQUITY DIVISION

COMMERCIAL COURT

S CI 2014 01911

ANTHONY MURPHY

Plaintiff

STATE OF VICTORIA

LINKING MELBOURNE AUTHORITY

First Defendant

Second Defendant

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JUDGE:	CROFT J
WHERE HELD:	Melbourne
DATE OF HEARING:	25 and 26 August 2014
DATE OF JUDGMENT:	10 September 2014
CASE MAY BE CITED AS:	Murphy v State of Victoria & Anor (No 2)
MEDIUM NEUTRAL CITATION:	[2014] VSC 404

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TRADE PRACTICES – Carrying on of a business – Conduct in trade or commerce – Injunctive relief – Australian Consumer Law and Fair Trading Act 2012, s 16 – Australian Consumer Law, ss 18 and 232 – Trade Practices Act 1974 (Cth), ss 52 and 80 – Fair Trading Act 1985, s 11.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr R. Merkel QC with Ms M. Richards SC and Ms S. Gory	Fitzroy Legal Service Inc
For the First Defendant	Mr S. McLeish SC, Solicitor-General with Ms K. Foley	Victorian Government Solicitor
For the Second Defendant	Mr A.J. Myers QC with Mr R.A. Heath	Clayton-Utz

HIS HONOUR:

Background

The matters presently before the Court are the subject of separate questions under r 47.04 of the Supreme Court (General Civil Procedure) Rules 2005. The separate questions were the subject of orders made on 8 August 2014. These orders were made for the reasons published on that date.[1]
[1]Murphy v State of Victoria & Anor [2014] VSC 363.

The separate questions were provided for in the 8 August 2014 orders, together with procedural orders providing for an agreed statement of facts, written submissions together with a statement of the separate questions. The presently relevant parts of the 8 August 2014 orders are as follows:
…
2.Pursuant to r 47.04 of the Supreme Court (General Civil Procedure) Rules 2005 (Vic), the following questions in the proceeding (the separate questions) be tried before the trial of all other questions in the proceeding, on the basis of any facts on which the parties agree and, failing that, on the basis of the pleaded facts:
(1)Assuming that each Defendant made each of the representations (the Representations) alleged in paragraphs 21, 25, 29 and 33 of the further amended statement of claim dated 11 July 2014 (the FASOC) (which is not admitted for the purpose of the trial of the separate questions), was that conduct engaged in as part of the carrying on of a business by it (as alleged in paragraph 19 of the FASOC), for the purposes of s 16 of the Australian Consumer Law and Fair Trading Act 2012 (Vic) (the Fair Trading Act)?
(2)Assuming that each Defendant made each of the Representations (which is not admitted for the purpose of the trial of the separate questions), was that conduct in trade or commerce for the purposes of s 18 of the Australian Consumer Law (the ACL), applying as a law of Victoria pursuant to s 8 of the Fair Trading Act?
(3)Assuming that each Defendant made each of the Representations in contravention of s 18 of the ACL (as alleged in paragraphs 37 of the FASOC) (which is not admitted for the purpose of the trial of the separate questions), should a final injunction in the form of that sought in paragraphs B(b) and B(c) of the Prayer for Relief in the FASOC be given?
3.The separate questions are listed for hearing on 25 and 26 August 2014.
4.On or before 4 pm on 15 August 2014, the plaintiff is to file and serve any statement of facts agreed by the parties for the purposes of the trial of the separate questions.
5.On or before 4 pm on 22 August 2014 each party is to file, and serve on each other party, written submissions in relation to the separate questions.
…
The parties did not agree a statement of facts and, consequently, the separate questions are answered on the basis of pleadings as indicated in the reasons published on 8 August 2014. It is not necessary for present purposes to rehearse the reasons for adopting this course. Nevertheless, it may be helpful to note at this point that the reasons for, and the basis and manner of, proceeding in this way are considered and explained in those reasons; and with reference to the authorities.

The plaintiff did, however, file papers on 18 August 2014 which were styled as an ‘Application Book’. As appears from a letter dated 20 August 2014 from the Victorian Government Solicitor’s Office, the filing of this material was not by agreement between the parties. This is made clear in the following part of that letter:

The Application Book was prepared without prior consultation with the First Defendant [the State of Victoria]. It does not constitute an agreed bundle, nor an agreed statement of facts as contemplated by the orders of 8 August 2014. Those orders provided that, in default of an agreed statement of facts, the separate questions were to be resolved on the pleadings. Our client reserves its rights to the extent that, by the tender of documents, your client seeks to depart from that order.

The parties did, however, agree at the commencement of the hearing on 25 August 2014 to the tender of the Application Book (‘AB’). It follows that recourse could be made to its contents in a manner consistent with the basis on which the separate questions are to be answered.[2] In other words, recourse could be had to the contents of documents referred to in the pleadings. The Authority also tendered further documents without objection and an order was made for confidentiality to the parties to the proceeding for one of those documents, which contains unpublished financial statements.[3] Naturally, if a party had any objection to the manner in which a document was being relied upon in the course of written or oral submissions, objection could be made. There were no such objections made during the course of the hearing.
Factual basis for determining separate questions
[2]See Murphy v State of Victoria & Anor [2014] VSC 363, particularly at [54] and the statement of Brooking J in Jacobson v Ross [1995] 1 VR 337 at 340-1 which is there set out.
[3]ie the audited, but unpublished, financial statements of the Authority for the year ended 30 June 2014.
Source and nature of factual basis

The representations alleged by the plaintiff were said to be made in three documents:

(1)the Executive Summary (“the Executive Summary”) from a document entitled “East West Link Stage One – Short Form Business Case” dated June 2013 (“the Short Form Business Case”);
(2)the “East West Link – Eastern Section: Comprehensive Impact Statement” (“the CIS”); and
(3)the “East West Link Stage One: Transport Summary Report” (“the Transport Summary Report”).

Pursuant to the orders made on 8 August 2014, the factual basis for determination of the separate questions, in the absence of an agreed statement of facts, is, on the basis of pleaded facts[4] - that is, such facts as emerge, uncontested, from the FASOC, the Defence to Further Amended Statement of Claim of the First Defendant, dated 17 July 2014 (“the State’s Defence”) and the Amended Defence of the Second Defendant, dated 17 July 2014 (“the Authority’s Defence”), together with the plaintiff’s reply to the State’s Defence, dated 13 August 2014 (“the Reply to the State’s Defence”) and the plaintiff’s reply to the second defendant’s defence, dated 13 August 2014 (“the Reply to the Authority’s Defence”).
[4]Orders made 8 August 2014, O. 2.

The plaintiff submits that the approach to be taken by the Court with respect to the separate questions involves: “… taking the plaintiff’s case at its highest and determining whether, as a matter of law, the facts pleaded by the plaintiff are capable of giving rise to relief. Facts asserted by the defendant but not admitted by the plaintiff are excluded from this analysis”.[5] Counsel for the State said in oral submissions that the State proceeds on the basis of such facts that emerge from the pleadings, but which are not in dispute.[6] The State’s approach is consistent with the reasons for judgment dated 8 August 2014.[7] The Authority adopted the same approach.[8] That is, the separate questions are to be decided on the basis of such facts as are pleaded by the plaintiff, or the defendants, and which are not in dispute.
[5]Submissions of the plaintiff – separate questions (“the Plaintiff’s Submissions”), [8](c).
[6]Transcript, page 11, lines 21 to 24; and page 13, line 8..
[7]Murphy v State of Victoria [2014] VSC 363 at [61] (Croft J).
[8]Transcript, page 128, lines 13 to 15.

The trial of separate questions under r 47.04 does not involve taking the plaintiff’s case at its highest. An example of the difficulty in the plaintiff’s approach is readily apparent. The plaintiff’s written submissions, contain an annexure entitled ‘Pleaded Facts.’ At paragraph 49 of the annexure, the plaintiff states ‘[t]he State and the Authority are, and have at all material times been, carrying on a business in relation to the Project.’ Indeed, the allegation that the State and, or alternatively, the Authority are carrying on a business is pleaded in paragraph 19 of the FASOC. It is this pleading which gives rise to the first question in issue here. At paragraph 25 of the Plaintiff’s Submissions, the plaintiff states that ‘[t]he terms of the [first] question accept the allegation in paragraph 19 of the FASOC that the State and the Authority are, and have at all material times been, carrying on a business in relation to the Project.’ This is, however, a gloss on the basis upon which the separate questions are to be considered, as indicated in the reasons published on 8 August 2014. It is clear, as a moment’s thought reveals, that the approach now advanced by the plaintiff would simply negate the whole separate questions process.

The plaintiff also asserts that the principles to be applied in answering the separate questions, on the basis of the approach taken by the Court in this case, are the principles applicable to a summary dismissal application.[9] The application of these principles, as asserted by the plaintiff, is not supported by the authorities considered in the reasons published on 8 August 2014 and is not the approach advocated by the State or the Authority. Rather, on the basis of the authorities previously considered in the reasons published on 8 August 2014 and on the basis of those reasons themselves, there is no warrant, in my view, for applying any different principles in the consideration of the separate questions than those which would be applicable if the questions arose in the ordinary course of a full trial and were decided according to facts as established in the ordinary trial process. The only difference in the present proceeding is that, absent an agreed statement of facts, the facts upon which the questions are to be decided are supplied by the pleadings themselves together with tendered documents; on the basis previously indicated. Once so supplied, those facts are, like any other facts established at trial, the basis for the analysis and answering of the issues the subject of the separate questions, in the same way as would occur in the ordinary trial process.
[9]Plaintiff’s Submissions, [9] and [10].

Background

The East West Link Project is the construction of a roadway which was recommended as a result of a study undertaken by infrastructure consultant, Sir Rod Eddington, entitled “Investing in Transport – East West Link Needs Assessment”, which was released in April 2008 (“the Project”).[10] The recommendation was for the construction of an 18 kilometre inner urban roadway extending across Melbourne from the Eastern Freeway to the Western Ring Road.[11] In an announcement on 17 November 2011, the Premier said that the Government had reviewed and enhanced the Project to include a new stage that would connect the Eastern Freeway to CityLink to the Port of Melbourne, as well as the connection between the Port of Melbourne and the Western Ring Road.[12] In the media release, dated 7 May 2013, the Premier, the Treasurer and the Minister for Public Transport and Roads announced a decision by the State to build what was referred to as “stage one” of the Project (“Stage One”).[13] Stage One of the Project included, but was not confined to, the eastern section of the Project (“the EWL (Eastern Section) Project”), which comprises a roadway connecting the western end of the Eastern Freeway to CityLink (“part (1) of the EWL (Eastern Section) Project”) and a roadway connecting that roadway to the Port of Melbourne area.[14]
[10]State’s Defence, [3B(a)]; Plaintiff’s Reply to the State’s Defence, [2(a)].
[11]State’s Defence [3B(a)]; Plaintiff’s Reply to the State’s Defence [2(a)]. The roadway which is to be constructed as part of the Project is also referred to as “the roadway”. The roadway is also variously referred to as “the tollway” or the “toll road”.
[12]State’s Defence [3B(f)]; Plaintiff’s Reply to State’s Defence [2(a)].
[13]FASOC [4]; State’s Defence [4].
[14]Stage One also includes: (1) access via City Link to M1, Port of Melbourne, Melbourne Airport and M80/Hume Freeway; (2) Eastern Freeway upgrading and managed motorways; and (3) CBD-oriented public transport enhancements to the north of the CBD. See FASOC [7]; State’s Defence [7].

The Executive Summary summarises, records or highlights that:

(a)part (1) of the EWL (Eastern Section) Project will be procured and delivered via an “Availability Payment Public Private Partnership (“PPP”) model”, with PPP delivery of project assets and services and with tolls retained by the State (page 8);
(b)other elements of the EWL (Eastern Section) Project will be procured separately by traditional methods (page 8);
(c)the total cost of Stage One is $6–8 billion (page 4);
(d)under the PPP model, the State receives the toll revenue streams, bearing the full cost (reduced toll revenues) or full benefit (increased toll revenues) that may result from fluctuating traffic volumes (page 8);
(e)a substantial Government funding contribution is assumed, and will be sized appropriately to address the high cost of private sector debt while preserving the risk allocation and financial incentive structures that are central to the PPP model (page 8);
(f)overall direction and oversight for Stage One will be provided by a Steering Committee chaired by the Secretary of the Department of Transport, Planning and Local Infrastructure (“the Department”) (page 8);[15]
(g)the LMA will manage the PPP procurement of part (1) of the EWL (Eastern Section) Project (page 8);
(h)Stage One will include commercial negotiations with Transurban for access via CityLink (page 8);
(i)as a classified High Value/High Risk project, Stage One is subject to the Gateway review process of the State’s Department of Treasury and Finance (page 8); and
(j)part (1) of the EWL (Eastern Section) Project has completed the first two stages/gates of the Gateway review process with funding approved in the recent Victorian State Budget (page 8).

[15]Part of the Department was previously known as the Department of Transport.

A number of steps had been taken by the State prior to the media release by the Premier, the Treasurer and the Minister for Public Transport and Roads, dated 7 May 2013. These steps had been taken by the State pursuant to various statutory powers, as follows:

(a)by order dated and published 16 May 2012, pursuant to s 136 of the Transport Integration Act 2010 (‘the TI Act’), the Minister for Roads declared the EWL (Eastern Section) Project to be a “Road Transport-Related Project” for the purposes of the TI Act;[16]
(b)also on 16 May 2012, pursuant to s 16 of the Road Management Act 2004 (Vic), the Minister for Roads assigned the EWL (Eastern Section) Project to the LMA;[17]
(c)by order dated 19 December 2012 and published 20 December 2012, pursuant to s 10 of the Major Transport Projects Facilitation Act 2009 (Vic) (“the MTPF Act”), the Governor in Council declared the EWL (Eastern Section) Project to be a declared project to which the MTPF Act applies;[18]
(d)by notice published 20 December 2012, pursuant to s 14 of the MTPF Act, the Premier appointed the Minister for Roads to be the Project Minster for the EWL (Eastern Section) Project;[19] and
(e)by notice dated 26 February 2013 and published 22 March 2013, the Minister for Roads gave notice pursuant to s 15 of the MTPF Act that he had appointed the LMA as the project proponent for the EWL (Eastern Section) Project.[20]
[16]The Authority’s Defence, [2B(b)]; Plaintiff’s Reply to the Authority’s Defence, [1].
[17]The Authority’s Defence, [2B(c)]; Plaintiff’s Reply to the Authority’s Defence, [1].
[18]State’s Defence, [3D(c)]; Plaintiff’s Reply to the State’s Defence, [4].
[19]State’s Defence, [3D(d)]; Plaintiff’s Reply to the State’s Defence, [4].
[20]State’s Defence, [3D(e)]; Plaintiff’s Reply to the State’s Defence, [4].

The Executive Summary

The State developed a detailed business case for the Project in or about June 2013.[21] A summary of the detailed business case was provided by the Short Form Business Case.[22] A copy of the Short Form Business Case (including the Executive Summary) was, on 28 June 2013, provided by the State to Infrastructure Australia, together with completed Infrastructure Australia templates.[23]
[21]FASOC [5]; State’s Defence [5].
[22]FASOC [6(a)]; State’s Defence [6(a)].
[23]State’s Defence [3C(g)]; Plaintiff’s Reply to State’s Defence [3(a)].

Infrastructure Australia is a statutory body which is established by s 4 of the Infrastructure Australia Act 2008 (Cth). Section 5 of that Act sets out the functions of Infrastructure Australia, as follows:

Primary function—providing advice
(1)Infrastructure Australia has the primary function of providing advice to the Minister, Commonwealth, State, Territory and local Governments, investors in infrastructure and owners of infrastructure on matters relating to infrastructure, including in relation to the following:
(a)Australia’s current and future needs and priorities relating to nationally significant infrastructure;
(b)policy, pricing and regulatory issues that may impact on the utilisation of infrastructure;
(c)impediments to the efficient utilisation of national infrastructure networks;
(d)options and reforms, including regulatory reforms, to make the utilisation of national infrastructure networks more efficient;
(e)the needs of users of infrastructure;
(f)mechanisms for financing investment in infrastructure.

Additional functions
(2) Infrastructure Australia has the following additional functions:
(a)to conduct audits to determine the adequacy, capacity and condition of nationally significant infrastructure, taking into account forecast growth;
(b)to develop lists (to be known as Infrastructure Priority Lists) that prioritise Australia’s infrastructure needs;
(c)to review and provide advice on proposals to facilitate the harmonisation of policies, and laws, relating to development of, and investment in, infrastructure;
(d)to evaluate proposals for investment in, or enhancements to, nationally significant infrastructure;
(e)to identify any impediments to investment in nationally significant infrastructure and identify strategies to remove any impediments identified;
(f)to promote investment in infrastructure;
(g)to provide advice on infrastructure policy issues arising from climate change;

(h)to review Commonwealth infrastructure funding programs to ensure they align with any Infrastructure Priority Lists;
(i)to undertake or commission research relating to Infrastructure Australia’s other functions;
(j)any functions that the Minister, by writing, directs Infrastructure Australia to perform;
(k)any other functions conferred on Infrastructure Australia by this Act or any other law.

On 1 July 2013, the Authority published the Executive Summary on its website; and a media release issued by the Premier, dated 1 July 2013, referred to the publication of the Executive Summary on the website of the Authority.[24] At various times since then, letters from Ministers to members of the public, written in response to their inquiries, referred to the fact that the Executive Summary could be found on the Authority’s website.[25]
[24]State’s Defence [3C(h)]; Plaintiff’s Reply to State’s Defence [3(b)].
[25]State’s Defence [3C(i)]; Plaintiff’s Reply to State’s Defence [3(b)].

The CIS and the Transport Summary Report

The publication of the CIS and the Transport Summary Report took place within the context of a statutory process which was conducted pursuant to the MTPF Act. It is to this process that consideration is now given.

On 27 May 2013, the Minister for Planning published scoping directions for the preparation of a comprehensive impact statement in relation to the EWL (Eastern Section) Project pursuant to s 22 of the MTPF Act.[26] The CIS was, on 31 October 2013, published on the Authority’s website in accordance with s 49(1)(a) of the MTPF Act.[27] The publication of the CIS on the Authority’s website was identified by the Minister for Public Transport and Roads in a media release dated 31 October 2013.[28] Moreover, at or about the same time, the Department also published the CIS on its website.[29] The CIS was, from 31 October to 12 December 2013, on exhibition for public comment.[30] The Transport Summary Report was also published on the Authority’s website, on or about 3 November 2013.[31]
[26]State’s Defence [3D(h)]; Plaintiff’s Reply to State’s Defence [4(a)].
[27]State’s Defence [3D(k)]; Plaintiff’s Reply to State’s Defence[4(a)].
[28]FASOC [14]; State’s Defence [14].
[29]State’s Defence [3D(l)]; Plaintiff’s Reply to State’s Defence [4(a)].
[30]State’s Defence [3D(m)]; Plaintiff’s Reply to State’s Defence [4(a)].
[31]State’s Defence [3D(n)]; Plaintiff’s Reply to State’s Defence [4(a)].

On 30 June 2014, the Minister for Planning made an approval decision granting the applicable approvals for the declared project, subject to the conditions set out in the approval decision, pursuant to s 77 of the MTPF Act.[32] On the same date, the Minister for Planning also published the Assessment Committee recommendation pursuant to s 83 of the MTPF Act by causing it to be published on the Department’s website.[33] The Assessment Committee recommendation is a written report to the Minister for Planning dated 30 May 2014 given under the provisions of s 73(8) of the MTPF Act.
[32]State’s Defence [3D(o)]; Plaintiff’s Reply to State’s Defence [4(a)].
[33]State’s Defence [3D(p)]; Plaintiff’s Reply to State’s Defence [4(a)].

It should be noted with respect to these and any other references to planning approvals or planning matters more generally in these reasons for judgment that these references are on the basis of pleaded facts in these proceedings and are not findings of fact (or law) of any relevance or effect beyond these proceedings.

The tender process

The State and the Authority are pursuing the procurement process for the EWL (Eastern Section) Project in tandem with the statutory approval process under the MTPF Act.[34] More particularly, the procurement process is being pursued by the State and the Authority in that the State proposes, following the recommendation of the Authority, to appoint a contractor or contractors to finance, design, construct and operate the EWL (Eastern Section) Project as a PPP with the State; the appointment will be made pursuant to a Project Agreement between the State and the contractor or contractors; and the Authority will administer the Project Agreement on behalf of the State.[35]
[34]FASOC [16]; State’s Defence [16].
[35]FASOC [17]; State’s Defence [17].

A reference design for the EWL (Eastern Section) Project was prepared by the Authority under the oversight of the State in the first half of 2013.[36] Expressions of interest to tender for part (1) of the EWL (Eastern Section) Project were invited by the State, through the Authority, on or about 18 July 2013.[37] Three tenderers were shortlisted by the State on or about 30 September 2013.[38] The State, through the Authority, released a “Request for Proposal” to the shortlisted tenderers on or about 31 October 2013.[39] The State and the Authority are proceeding to appoint the successful contractor or contractors in relation to part (1) of the EWL (Eastern Section) Project pursuant to the tender process by late 2014, and to commence construction of that part of the Project in late 2014, with an anticipated construction period of around five years.[40]
[36]FASOC [9]; State’s Defence [9].
[37]FASOC [10]; State’s Defence [10] and [11].
[38]FASOC [12]; State’s Defence [12].
[39]FASOC [13]; State’s Defence [13].
[40]FASOC [18]; State’s Defence [18].

Critical Statutory Provisions
Application of the Australian Consumer Law

The critical statutory provisions in the present context are contained in s 16 of the Australian Consumer Law and Fair Trading Act 2012 (Vic) (“the ACL Victoria”):

16. Application law of this jurisdiction
The application law of this jurisdiction binds (so far as the legislative power of Parliament permits) the Crown in right of this jurisdiction and of each other jurisdiction, so far as the Crown carries on a business, either directly or by an authority of the jurisdiction concerned.

The word “business” is defined in s 2 of the Australian Consumer Law (“the ACL”) as including “… a business not carried on for profit.” This definition is applied to the ACL Victoria by sub-s 3(2) of that Act.

For the sake of completeness, reference should also be made to ss 15, 17 and 18 of the ACL Victoria (provisions in the same Part (Part 2.4) of that legislation as s 16) and the definition of ‘participating jurisdiction’ contained in sub-s 6(1) of this legislation:

15. Part does not apply to Commonwealth
In this Part, “participating jurisdiction: or other jurisdiction does not include the Commonwealth.
…
17. Application law of other jurisdictions
(1)The application law of each participating jurisdiction other than this jurisdiction binds the Crown in right of this jurisdiction, so far as the Crown carries on a business, either directly or by an authority of this jurisdiction.
(2)If, because of this Chapter, a provision of the law of another participating jurisdiction binds the Crown in right of this jurisdiction, the Crown in that right is subject to that provision despite any prerogative right or privilege.

18. Activities that are not business
(1)For the purposes of sections 16 and 17, the following do not amount to carrying on a business—

(a)       imposing or collecting—
(i)        taxes; or
(ii)       levies; or
(iii)      fees for authorisations;

(b)granting, refusing to grant, revoking, suspending or varying authorisations (whether or not they are subject to conditions);

(c) a transaction involving—
(i)only persons who are all acting for the Crown in the same right (and none of whom is an authority of a State); or
(ii)only persons who are all acting for the same authority of a State; or
(iii)only the Crown in right of a State and one or more non-commercial authorities of that State; or

(iv) only non-commercial authorities of the same State;

(d)the acquisition of primary products by a government body under legislation, unless the acquisition occurs because—
(i) the body chooses to acquire the products; or
(ii)the body has not exercised a discretion that it has under the legislation that would allow it not to acquire the products.

(2)Subjection (1) does not limit the things that do not amount to carrying on a business for the purposes of sections 16 and 17.

(3) In this section—

acquisition of primary products by a government body under legislation includes vesting of ownership of primary products in a government body by legislation;
authorisation means a licence, permit, certificate or other authorisation that allows the holder of the authorisation to supply goods or services;
government body means a State or an authority of a State;
primary products means—
(a)       agricultural or horticultural produce; or
  (b)       crops, whether on or attached to the land or not; or
  (c)       animals (whether dead or alive); or
  (d)      the bodily produce (including natural increase) of animals.

(4)       For the purposes of this section, an authority of a State is non-commercial if—
  (a)       it is constituted by only one person; and
  (b)       it is neither a trading corporation nor a financial corporation.

In sub-s 6(1) of the ACL Victoria, the following definition appears:
“participating jurisdiction” means a jurisdiction that is a party to the Intergovernmental Agreement and applies the Australian Consumer Law as a law of the jurisdiction, either with or without modifications;

It is common ground that the provisions of s 16 of the ACL Victoria apply in the present circumstances in the sense that, as indicated previously, if the State or the Authority do carry on a business within the terms of those provisions, then the provisions of the ACL are applicable.
The State and the Authority

In the present context, it is not necessary to venture into an analysis of the nature, powers and functions of the body politic under the Crown being the State of Victoria as the basis upon which the separate questions are to be determined does not require such analysis. It is, however, appropriate and relevant in the present circumstances, both with respect to the first and the second of the separate questions, to consider the nature, powers and functions of the Authority. A number of provisions of the MTPF Act are relevant in this respect, namely the definitions of ‘declared project’ and ‘Project Authority’ under s 3, the provisions for declaration of a transport project under s 10 and the functions and powers of a project authority under ss 101 and 102, respectively. These provisions are as follows:

…
declared project means a transport project declared under section 10 to be a declared project;
…
project authority, for a declared project or an approved project, means—
(a) the project proponent; or
(b) if the Project Minister appoints an entity under section 6, that entity;
…
10 Declaration of a transport project
(1)The Governor in Council, on the recommendation of the Premier, may declare a transport project to be a declared project—
(a) to which this Act applies; or
(b) this Act (other than Part 3 and 8) applies.
(2)A declaration under subsection (1) must be published in the Government Gazette.

(3) A declaration under subsection (1) takes effect—
(a) on the day the declaration is published in the Government Gazette; or

(b) if the declaration specifies a later day, on that day.
…

101 A project authority’s functions
A project authority has, for an approved project, the following functions—
(a) to facilitate, on behalf of the State, the development of the approved project;
(b)to seek and evaluate submissions from persons interested in undertaking the approved project;
(c) to negotiate with persons interested in undertaking the development of the approved project;
(d) to make recommendations in relation to contractual arrangements between the State and any other person for the development or delivery of the approved project;
(e) to enter into contractual arrangements with any persons for the development or delivery of the approved project and to administer and manage such arrangements;
(f) to administer and manage agreements and arrangements between the State and any other person for, or relating to, the development or delivery of the approved project;
(g) to facilitate and coordinate consultations with statutory authorities and agencies of the State and other bodies or persons involved in, or affected by, the development or operation of the approved project;
(h)to negotiate and enter into arrangements with statutory authorities and agencies of the State and other bodies or persons involved in, or affected by, the development or operation of the approved project;
(i) to make recommendations to the Project Minister in relation to facilitating the approved project and coordinating with statutory authorities, agencies of the State and other bodies or persons involved in, or affected by, the development or operation of the approved project;
(j)to ensure that agreements and arrangements between the State and any other person for, or relating to, the development or delivery of the approved project are performed in accordance with their terms;
(k)to commission transport infrastructure that is developed as part of an approved project;
(l) to undertake any other functions that are conferred on the project authority by or under this Act or any other Act.

102 A project authority’s powers
(1)For the purpose of performing its project functions, the project authority, in addition to all other powers conferred on it by or under any other Act or law, may—
(a) exercise a specified project power; and
(b) exercise a power conferred on it by or under this Act.
(2) In addition, a project authority may do all other things necessary or convenient to be done for, or in connection with, or as incidental to, the performance of its project functions under this Act.

For the purposes of these provisions, it is noted that the Authority has been declared as a ‘Project Authority’[41] under s 6 of this Act and that the East West Link is a ‘Declared Project’ for the purposes of the definition in s 6, having been declared under the provisions of s 10 of the Act.[42]

[41]The Authority’s Defence, [2(b)(i)].

[42]The Authority’s Defence, [2B(d)]; Plaintiff’s Reply to the Authority’s Defence, [1].

The statutory framework under which the Authority is established and from which it derives its powers and functions is provided by the provisions of the TI Act and the MTPF Act. The provisions of these Acts clearly and explicitly complement each other. Section 3A of the MTPF Act provides that: ‘This Act is interface legislation within the meaning of the Transport Integration Act 2010’. The expression ‘interface legislation’ is defined in s 3 of the TIA as meaning, inter alia, the MTPF Act. It is clear from the provisions of both pieces of legislation, and critical in the present context, that this legislation enables the Authority to do what it has done and will do in connection with the Project. Having regard to this position, for the reasons which follow, it is not to the point in these proceedings that there may be a possibility that, as submitted by the plaintiff, the relevant minister might appoint a private “entity” as a “project authority” under s 6 of the MTPF Act.

With respect to the Project, the Authority was at all relevant times: first, a ‘transport body’ within the meaning of s 3 of the TI Act; secondly, an ‘interface body’ within the meaning of s 3 of the TI Act; and, thirdly, the ‘project proponent’ for the purposes of the MTPF Act.[43]
[43]As to the third point, see the Authority’s defence, [2B] [AB 37-39].

The Authority is established by s 134 of the TI Act and s 135 of that Act provides that: ‘In performing its functions and exercising its powers, the Linking Melbourne Authority represents the Crown’. The reference to the Crown in this context is, of course, a reference to the Crown in right of the State of Victoria.

The object of the Linking Melbourne Authority is provided for in s 137 of the TI Act in the following terms:

Object of Linking Melbourne Authority
(1)The primary object of the Linking Melbourne Authority is to facilitate the efficient development, delivery and operation of any Road Transport-Related Project consistent with the vision statement and the transport system objectives.
(2)Without limiting the generality of subsection (1), the primary object includes the following—
(a)to ensure, in collaboration with transport bodies and public entities, that any Road Transport-Related Project supports an integrated transport system which seeks to meet the needs of all transport system users;
(b)to ensure that any Road Transport-Related Project supports a sustainable Victoria by—
(i)providing walking and cycling infrastructure for transport;
(ii)seeking to improve the environmental performance and minimise the adverse environmental impacts of the Road Transport-Related Project;

(c)to contribute to social wellbeing by providing access to opportunities and supporting liveable communities;
(d)to promote economic prosperity through efficient and reliable movement of persons and goods;
(e)in collaboration with relevant bodies, to improve the safety of the road system for road users and seek to reduce deaths and injuries.

As appears from these provisions, the primary object of the Authority is ‘to facilitate the efficient development, delivery and operation of any Road Transport-Related Project consistent with the vision statement and the transport system objectives’.[44] The ‘vision statement’ is provided for in s 6 of the TI Act in the following terms:
[44]See s 137 of the TI Act – the ‘vision statement’ appears in s 6 of the TI Act; and the ‘transport system objectives’ appear in Part 2, Division 2 of the TI Act.
Vision statement
The Parliament recognises the aspirations of Victorians for an integrated and sustainable transport system that contributes to an inclusive, prosperous and environmentally responsible State.

The provisions of the TI Act do not contemplate the operation of the Authority as a profit making entity. This is in contrast to legislation governing the activities of other entities, such as the Reserve Bank of Australia.[45]

[45]See Sykes v Reserve Bank of Australia (1997) 151 ALR 579.

The functions of the Authority are set out in s 138 of the TI Act, in the following terms:

Functions of the Linking Melbourne Authority
(1)The functions of the Linking Melbourne Authority are—
(a)to facilitate, on behalf of the State, the scoping, development, construction, delivery and operation of any Road Transport-Related Project;
(b)to seek and evaluate submissions from persons interested in undertaking any Road Transport-Related Project;
(c)to negotiate with persons interested in undertaking any Road Transport-Related Project;
(d)to make recommendations in relation to contractual arrangements between the State and any other person for the development, delivery or operation of any Road Transport-Related Project;
(e)to administer and manage agreements and arrangements between the State and any other person for, or relating to, the development, delivery or operation of any Road Transport-Related Project;
(f)to facilitate and co-ordinate consultations with public entities and other bodies or persons involved in, or affected by, the development, delivery or operation of any Road Transport-Related Project;
(g)to negotiate and enter into arrangements with public entities and other bodies or persons involved in, or affected by, the development, delivery or operation of any Road Transport-Related Project;

(h)to make recommendations to the Minister in relation to facilitating any Road Transport-Related Project and co‑ordinating with public entities and other bodies or persons involved in, or affected by, the development, delivery or operation of the Road Transport-Related Project;
(i)to ensure that agreements and arrangements between the State and any other person for, or relating to, the development, delivery or operation of any Road Transport-Related Project are performed in accordance with their terms;
(j)to enter into contractual arrangements with any other person for the provision of any infrastructure or services in connection with or relating to the development, delivery or operation of any Road Transport-Related Project;
(k)to perform any other functions or duties conferred on the Linking Melbourne Authority by any other Act or any regulations under any other Act.

(2)In performing the functions conferred on the Linking Melbourne Authority, the Linking Melbourne Authority must—
(a)where relevant, engage with stakeholders so as to ensure better outcomes for all Victorians;
(b)conduct research and collect information relating to the performance of those functions and the operation of the transport system so as to enable the Linking Melbourne Authority to meet the object of the Linking Melbourne Authority;
(c)efficiently deal with any complaints relating to the performance of its functions.

(3)The Linking Melbourne Authority may, with the approval or at the direction of the Minister, cease to perform all or any of its functions.

Although these provisions are extensive and detailed, they are generally directed to functions which relate to the development, delivery or operation of any ‘Road Transport-Related Project’. This is consistent with the first and, by reference to other functions enunciated, seemingly the principal function, which is ‘to facilitate, on behalf to the State, the scoping, development, construction, delivery and operation of any Road Transport-Related Project’. It is, in my view, significant, that this legislation does not confer like functions on any citizen or private trader, individual or corporation. No such person is permitted by the relevant legislation to carry out the Authority’s functions in relation to any ‘Road Transport-Related Project‘.[46]

[46]Cf the situation described in Paramedical Services Pty Ltd v Ambulance Service of New South Wales (1999) 217 ALR 502 at 518, [87].

Moreover, the Authority is required, in performing its statutory functions, to ‘… where relevant, engage with stakeholders so as to ensure better outcomes for all Victorians’.[47] These provisions, together with the other provisions to which reference has been made, do, in my view, emphasise the primarily non-commercial nature of the objects and functions of the Authority. This mandatory requirement to engage with stakeholders, as provided for in sub-s 138(2) of the TI Act is relevant to an assessment of the nature and purpose of the relevant publications, the impugned conduct, in this case. In this respect, the State and the Authority submit that the impugned conduct is consistent with the Authority’s duties and responsibilities under the TI Act. As discussed in the reasons which follow, this does, in my view, go to the first and second separate questions.
[47]Sub-section 138(2)(a) of the TI Act.

Other provisions of the TI Act are also of importance. Division 2 of that Act specifies the ‘transport system objectives’; Division 3 specifies the ‘decision making principles’; and Division 5 outlines the matters guiding the administration and interpretation of the TI Act. Division 5 of Part 2 of the TI Act contains provisions to the following effect:

(a)When exercising its powers and performing functions under the TI Act, as a ‘transport body’, the Authority must have regard to the following: (1) the ‘decision making principles’; and (2) the ‘transport system objectives’.[48]
(b)When exercising its powers and performing functions under ‘any interface legislation’ (including the MTPF Act), as an ‘interface body’, the Authority must have regard to the following: (1) ‘decision making principles’; and (2) the ‘transport system objectives’.[49]
(c)For the purposes of ss 24 and 25, a ‘transport body’ or ‘interface body’ may determine the weight to give to each transport system objective.[50]
(d)For the purposes of ss 24 and 25, a ‘transport body’ or ‘interface body’ may determine the weight to give to each ‘decision making principle’.[51]
[48]See s 24 of the TI Act.
[49]See s 24 of the TI Act.
[50]See s 26 of the TI Act.
[51]See s 27 of the TI Act.

Carrying on Business
The separate question and pleadings to which it relates

The first of the separate questions is directed to the issue whether either or both of the defendants, the State or the Authority, is or are carrying on a business. Although previously set out, it is helpful, in the present context, to set out its terms again for the purpose of examining in detail the allegations assumed for the purposes of that question and the allegation that each of the defendants is carrying on a business as alleged in the FASOC. The first separate question is in the following terms:

Assuming that each Defendant made each of the representations (the Representations) alleged in paragraphs 21, 25, 29 and 33 of the further amended statement of claim dated 11 July 2014 (the FASOC) (which is not admitted for the purpose of the trial of the separate questions), was that conduct engaged in as part of the carrying on of a business by it (as alleged in paragraph 19 of the FASOC), for the purposes of s 16 of the Australian Consumer Law and Fair Trading Act 2012 (Vic) (the Fair Trading Act)?

The plaintiff’s allegation that the defendants, or either of them, are carrying on a business is contained in paragraph 19 of the FASOC, in the following terms:

19.State and/or the Authority are, and have at all material times been, carrying on a business in relation to the Project (the Business).
Particulars
Save to refer to the activities of the State and/or the Authority alleged in paragraphs 4 to 18 above, and to say that the business carried on by the State and/or the Authority includes designing, funding, developing and procuring the Project and to take such other steps as are necessary to enable its construction and operation as a PPP between the State and/or the Authority and the successful tenderer or tenderers, the Plaintiff is unable to provide further particulars until after discovery.

Paragraph 20 of the FASOC pleads that by virtue of s 16 of the ACL Victoria, the ACL applies to the State and the Authority in relation to their carrying on of the Business, as defined in paragraph 19 of the FASOC. It follows that it is critical to the plaintiff’s allegations in the FASOC and to the relief sought by the plaintiff that the State or the Authority is carrying on business as alleged. If this were not the case, then it follows that the ACL is not applicable and the plaintiff’s case must fail in its entirety.

The plaintiff submits that the allegation pleaded in paragraph 19 of the FASOC should be accepted by the court:

25. The terms of the question accept the allegation in paragraph 19 of the FASOC that the State and the Authority are, and have at all material times been, carrying on a business in relation to the Project. The business is described in the particulars to paragraph 19 as including ‘designing, funding, developing and procuring the Project and to take such other steps as are necessary to enable its construction and operation as a PP between the State and/or the Authority and the successful tenderer or tenderers.’

26. The pleaded facts provide a solid basis for concluding that a business of this nature is being and has been carried on by the State and the Authority since at least 1 July 2013.

As discussed previously, if the plaintiff’s contention is that the terms of the first question should be read as accepting the plaintiff’s allegation in paragraph 19 of the FASOC that the State and, or alternatively, the Authority are carrying on a business, then the plaintiff’s contention is rejected. Acceptance of the plaintiff’s pleading in paragraph 19 of the FASOC without regard to the contents of the further responsive pleadings - in defence and reply – as previously observed, would negate the separate questions process.

For the purposes of this question, it is assumed, though not admitted by either the State or the Authority, that the representations alleged in paragraphs 21, 25, 29 and 33 of the FASOC are established. These alleged representations are as follows:

The BCR representation
21.Since in or about July 2013, the State and the Authority have made, and are continuing to make, a representation that the Project will produce a Benefit Cost Ration (BCR) of 1.4 (the BCR representation).
Particulars
Save to say the BCR representation is made in the Business Case at page 7, the Plaintiff is unable to provide further particulars until after discovery.

…
The Net Benefit representation
25.Since in or about July 2013, the State and the Authority have made, and are continuing to make, a representation that the Project will have a net economic benefit (in present value terms as at 2013) of $1.476 billion (the Net Benefit representation).
Particulars
Save to say that the Net Benefit representation is made in the Business Case at page 7, the Plaintiff is unable to provide further particulars until after discovery.

…
The Traffic Volume representation
29. Since in or about October 2013, the State and the Authority have made, and are continuing to make, a representation that approximately 100,000 to 120,000 vehicles will use Stage One of the East West Link each day in 2031 (the Traffic Volume representation).
Particulars
Save that the representation is made in:
(a)the CIS, referred to in paragraph 14 above, at page 37 of the Summary Report, page 22 of the Executive Summary and page 35 of Chapter 7 – Traffic and Transport; and
(b)the Transport Summary Report, referred to in paragraph 15 above, at pages 9 and 13,

the Plaintiff is unable to provide further particulars until after discovery.

…
Standard Methodology representation
33.Since in or about July 2013, the State and/or the Authority has made, and is continuing to make, a representation that the formal cost benefit analysis for the Project was carried out in accordance with standard methodology (the Standard Methodology representation).
Particulars
Save to say that the Standard Methodology representation is made in the Business Case at page 7, the Plaintiff is unable to provide further particulars until after discovery.

At this point, it may be helpful to note by way of explanation that, by reference to the reasons published on 8 August 2014, the ‘reservation’ contained in the particulars to the pleadings set out above, namely that the plaintiff is ‘unable to provide further particulars until after discovery’ does not affect the basis or process of determining the separate questions. As indicated in those reasons, to which reference was made previously in this context, the pleadings themselves provide a sufficient factual basis to determine the separate questions and there is no basis or utility to conduct, as the plaintiff would have it, something in the nature of a preliminary discovery process for the purpose of addressing the issues the subject of the separate questions.

Applicable principles

As indicated previously, s 16 of the ACL Victoria provides for the application of the ACL only ‘so far as the Crown [the State of Victoria] carries on a business’. It is for the plaintiff, who bears the onus, to persuade the Court that this provision is satisfied.

The meaning of ‘carries on a business’ has been considered in many cases. In Blockey v The Federal Commissioner of Taxation,[52] the High Court indicated that a business is carried on where there is a series of transactions,[53] comprising a profit making scheme or venture.[54] In Hungier v Grace,[55] Barwick CJ considered that system and regularity are involved in the carrying on of a business, but cautioned that the inquiry does not end at that point:[56]

Whilst no doubt system and regularity are involved in the carrying on of a business, it does not necessarily follow that one who has transactions of the same kind systematically or regularly is carrying on a business in those transactions. One may systematically make regular deposits to a bank account but not be carrying on a business of doing so. In other words, system and regularity of making transactions are not in themselves definitive in this field. Their absence may well deny that a business is being carried on but their presence does not necessarily establish that it is.

[52](1923) 31 CLR 503.

[53](1923) 31 CLR 503 at 507 (Knox CJ), 508 (Isaacs J), 509 (Rich J), 510 (Starke J). See also Kirkwood v Gadd [1910] AC 422 at 431 (Lord Chancellor Loreburn); and Hope v Bathurst City Council (1980) 144 CLR 1 at 8-9 (Mason J) (referring to Smith v Anderson (1880) 15 ChD 247 at 277-8 (Brett LJ), discussed further in Fasold v Roberts (1997) 70 FCR 489 (Sackville J).

[54](1923) 31 CLR 503 at 506 (Knox CJ), at 507-8 (Isaacs J), at 509 (Rich J), at 510 (Starke J); cf the definitions of “business” in s 2 of the ACL which provides that “business” includes a business not carried on for profit (provisions applicable to the ACL Victoria under sub-s 3(2) of that Act).

[55](1972) 127 CLR 210.

[56](1972) 127 CLR 210 at 217 (Barwick CJ); and see Smith v Campbell (1979) 142 CLR 509 at 514-5 (Barwick CJ).

In JS McMillan Pty Ltd v Commonwealth of Australia,[57] Emmett J said:[58]
[57](1997) 77 FCR 337.
[58](1997) 77 FCR 337 at 354 (Emmett J).

The term “business” is defined in s 4 as including a business not carried on for profit. Nevertheless, it is still necessary to find an activity which can be characterised as carrying on a business. Words such as “business” have “about them a chameleon-like hue, readily adapting themselves to their surroundings, different though they may be”: per Mason J in FCT v Whitfords Beach Pty Ltd (1982) 150 CLR 355 at 378-9; 39 ALR 521 at 537. “The expression ‘carry on business’, in its ordinary meaning, signifies a course of conduct involving the performance of a succession of acts and not simply the effecting of one solitary transaction”: per Gibbs J in Smith v Capewell (1979) 142 CLR 509 at 517; 26 ALR 507 at 514.

In that case, one of the issues before the court related to the application of s 2A of the Trades Practices Act 1974 (Cth), (“the TPA”), which provided:

(1)Subject to this section…this Act binds the Crown in right of the Commonwealth in so far as the Crown in right of the Commonwealth carries on a business, either directly or by an authority of the Commonwealth.

…

The Commonwealth had issued a request for tender to purchase packages consisting of aspects of activities of the Australian Government Printing Service. Emmett J held that the fact that the Australian Government Printing Service carried on a publishing business did not mean that the Commonwealth, in conducting a sale of that business, was carrying on a business. It was not contended that the Commonwealth was engaged in a business of selling assets.[59] The conduct of offering plant and equipment for sale did not amount to the carrying on of a business.[60]

[59](1997) 77 FCR 337 at 357 (Emmett J).

[60](1997) 77 FCR 337 at 357 (Emmett J).

The circumstances described in JS McMillan Pty Ltd v Commonwealth of Australia illustrate the first limitation inherent in s 16 of the ACL Victoria. In fact, whilst the provisions of s 16 may, on their face, appear to be cast in quite general and non-technical terms, the authorities indicate that there are three important limitations inherent in these provisions, or provisions of this nature.

The first limitation is that in applying these provisions, the focus must be on the impugned conduct: the impugned conduct must be engaged in, in the course of carrying on the business. As indicated above, JS McMillan Pty Ltd v The Commonwealth was decided in the context of the equivalent provisions of the TPA, which rendered that Act applicable to the Commonwealth ‘so far as’ it carries on a business. Emmett J held ‘that that expression signifies that the Commonwealth is to be bound only where the conduct complained of is engaged in, in the course of carrying on the business’.[61] In so doing, his Honour rejected the alternative construction that, once it was accepted that the Commonwealth was carrying on a business, the TPA applied to all conduct connected in some way with that business. The construction adopted by Emmett J in McMillan has been applied consistently to provisions equivalent to s 16 of the ACL Victoria.[62] The need to focus on the conduct complained of is also clear from the decision of the High Court in NT Power Generation Pty Ltd v Power and Water Authority.[63] In that case, the Power and Water Authority (“PAWA”) carried on a business of transmitting and distributing electricity generated or bought by it to consumers using a network of transmission and distribution infrastructure throughout the Northern Territory. NT Power Generation Pty Ltd (“NT Power”) had applied to use the PAWA transmission and distribution infrastructure to transmit electricity it had generated to consumers, but PAWA denied the request. NT Power claimed that PAWA had contravened s 46 of the Trade Practices Act 1974, which, among other things, prohibited a company from taking advantage of its market power to prevent the entry of another person into the market. PAWA was a body corporate established under the Power and Water Authority Act (NT), and therefore, the Trade Practices Act only applied in so far as it carried on a business.[64] The majority said that it is not required that the conduct in question must itself be the actual business engaged in;[65] thus observing:

The flaws in PAWA’s approach. PAWA proceeded on an erroneous construction of s 2B. It may be accepted that the conduct proscribed by the Act, if it is to fall within s 2B, must be engaged in in the course of PAWA carrying on a business. But the conduct need not itself be the actual business engaged in. Had s 2B not been enacted, the conduct alleged against PAWA would not be examinable under the legislation because PAWA is an authority of the territory – part of the “Crown in right … of the Northern Territory”, ie the Northern Territory Government. But where such an authority “carries on a business” this removes the governmental obstacle to curial examination of its conduct in order to see whether s 46 has been contravened. PAWA would reverse the process and invert the correct approach: according to PAWA, it is necessary to examine specific conduct, and only when a particular contravention is found is it then relevant to examine whether that contravention can be described as carrying on a business.

This observation does not, however, cast doubt on the authorities, to which reference has been made, which require that the conduct be in the course of carrying on a business; a position made clear by the majority in NT Power Generation.[66] PAWA submitted that because it was not in the business of providing access to its transmission and distribution infrastructure, it cannot be said to have contravened the Act by refusing access to that infrastructure. The High Court rejected that argument, and found that the impugned conduct had taken place in the course of PAWA carrying on a retail business: that is, ‘in the course of carrying on the business of supplying retail customers, and for the purpose of preventing short-term competition in that business from NT Power, [PAWA] denied NT Power access to its infrastructure services.’[67]

[61](1997) 77 FCR 337 at 356 (Emmett J).

[62]Easts Van Villages Pty Ltd v Minister Administering the National Parks and Wildlife Act (2001) Aust Contract R 90-132 (NSWSC) at [132] (Mathews AJ); RT & YE Falls Investments Pty Ltd v New South Wales [2001] NSWSC 1027 at [78] (Palmer J); New South Wales v RT & YE Falls Investments Pty Ltd (2003) 57 NSWLR 1 at 5, [24] (Spigelman CJ); GEC Marconi Systems Pty Ltd v BHP Information Technology Pty Ltd (2003) 128 FCR 1 at 303, [1374] (Finn J); Village Building Co Ltd v Canberra International Airport Pty Ltd (No 2) (2004) 134 FCR 422 at 445, [90] (Finn J); Roads and Maritime Services v Devine Marine Group Pty Ltd [2013] NSWSC 1467 at [133] (Stevenson J); PPK Willoughby Pty Ltd v Roads and Maritime Services [2014] NSWSC 407 at [22]–[23] (Campbell J).

[63](2004) 219 CLR 90.

[64]Trade Practices Act 1974 (Cth), s 2B.

[65](2004) 219 CLR 90 at 116, [67] (McHugh ACJ, Gummow, Callinan and Heydon JJ).

[66](2004) 219 CLR 90 at 119, [74] (McHugh ACJ, Gummow, Callinan and Heydon JJ).

[67](2004) 219 CLR 90 at 119, [74] (McHugh ACJ, Gummow, Callinan and Heydon JJ).

It follows that, in the present case, the relevant question is whether the making of the Representations was in the course of carrying on a business by the State. As the authorities indicate, it is not sufficient that the making of the Representations may be said merely to be connected in some way with a business conducted by the State.

The second limitation is that it is not sufficient that the making of the Representations may be said to be connected in some way with a business to be conducted by the State at some time in the future. This follows from the first limitation, just discussed, and is reinforced by the use of the present tense in s 16 of the ACL Victoria, which requires that the State ‘carries on a business’. This limitation operates similarly to the limitation with respect to conduct which precedes the undertaking of any trade or commerce and is, consequently, not to be regarded as then in trade or commerce.[68]
[68]See Auswest Timbers Pty Ltd v Secretary to the Department of Sustainability and Environment (2010) 241 FLR 360 at 434, [156] (Croft J); and see below, [99].

The point that activities preparatory to the establishment of a business do not constitute the commencement of or the carrying on of the relevant business was made very clearly by the Full Court in Pioneer Concrete Services Ltd v Galli[69] where, in a joint judgment, Crockett, Murphy and Ormiston JJ said:[70]

The word “business” frequently poses difficulties for the courts. As Lord Diplock said in Town Investments Ltd v Department of the Environment [1978] AC 359, at p. 383: “The word ‘business’ is an etymological chameleon; it suits its meaning to the context in which it is found. It is not a term of legal art and its dictionary meanings, as Lindley LJ pointed out in Rolls v Miller (1884) 27 Ch D 71, at p. 88 embrace ‘almost anything which is an occupation, as distinguished from a pleasure - anything which is an occupation or duty which requires attention is a business’.”
Recently Mason J attempted to define the word “business” in its ordinary or popular meaning for the purpose of certain rating sections in the Local Government Act 1919 (NSW). In Hope v Bathurst City Council (1980) 144 CLR 1, at pp. 8-9; 29 ALR 577, at pp. 582-3, in a judgment which was concurred in by Gibbs, Stephen and Aickin JJ, Mason J accepted meaning No. 19 from the Shorter Oxford Dictionary: “A commercial enterprise as a going concern”, as the definition which came closest to the popular meaning, although he considered that: “it is the words ‘carrying on’ which imply the repetition of acts (Smith v Anderson (1880) 15 Ch D 247, at pp. 277-8) and activities which possess something of a permanent character”. Referring to the particular activities in question he said that the word “business” denoted “activities undertaken as a commercial enterprise in the nature of a going concern, that is, activities engaged in for the purpose of profit on a continuous and repetitive basis”. Without necessarily adopting that as a definition which can be relied on in all cases and for enterprises which may not have a profit-making purpose, such a definition is sufficient for present purposes.
But the difficulty in the present case is only partly answered by this definition. There is little doubt that if the respondents obtain the leases and start quarrying for sand and stone, as they indeed hope and intend to do, they will be carrying on one or more of the proscribed businesses. It is the question whether one of these business has yet come into existence which requires answering in the present case. The elements of continuity and repetition are not, in our opinion, satisfied. There is no commercial enterprise yet under way. There are no customers and there is no activity which will produce stone, gravel or other quarry products.
In the end it is not necessary in the present case to analyse precisely when a business comes into existence. This has provided difficulties in many other contexts, although no authority was cited to us, and indeed none is known to us, on the question when the carrying on of a business commences for the purpose of a covenant in restraint of trade. There are of course many cases which have attempted to define the meaning of the expression “carry on a business”: cf. Stroud's Judicial Dictionary, 4th ed., vol. 1, pp. 393-4. But the temporal element appears only to have arisen in other contexts and in particular in taxation cases. The tax cases have attempted to define when certain rural business have begun, usually for the purpose of ascertaining whether claimed outgoings were necessarily incurred in carrying on a business for the purpose of gaining or producing assessable income. For that purpose the commencement of growing a grove of avocado trees or the acquisition and raising of a relatively small number of stud cattle have been held sufficient, although profit has not been produced or expected for many years: cf Tweddle v Federal Commissioner of Taxation (1942) 2 AITR 360; Thomas v Federal Commissioner of Taxation (1972) 46 ALJR 397 and Ferguson v Federal Commissioner of Taxation (1979) 79 ATC 4261. The facts in these cases are somewhat remote from the present issue. Two earlier English cases on excess profit duty raised the question more directly: Cannop Coal Co Ltd v Inland Revenue Commissioners (1919) 12 Tax Cas 92; Birmingham and District Cattle By-Products Co Ltd v Inland Revenue Commissioners (1920) 12 Tax Cas 31. Each held that preparatory activities did not amount to the commencement of a business. The first involved the sinking of pits and drifts, i.e. sloping shafts, preparatory to coal-mining. The drifts actually produced coal which was intended to be used to work the pit-sinking machinery. However, more coal was obtained than was needed and the surplus was sold on the open market at a profit. It was held by Sankey J that when this was done on a working basis the business had commenced. Although those cases may appear to be helpful, we do not rely upon them to resolve this appeal.
The present case is quite clear. The work carried out up to the trial was entirely exploratory and did not even amount to the direct preparation of any quarries. Although they had elements of repetition and continuity, there were no activities which formed part of profit-making or other commercial transactions. That does not lead to the conclusion that, if similar activities were carried out during the operation of a business, those activities would not form part of or be incidental to that business. But before the business gets under way, those preparatory acts cannot be characterized as constituting or forming part of a business; nor can the participants be described at that stage as carrying on or conducting a business.

[69][1985] VR 675.

[70][1985] VR at 705-6.

In the circumstances of the present case, the plaintiff made passing reference in submissions to the Pioneer Concrete Services case, seeking to rely on the decision of the House of Lords in Khan v Miah[71] for the following proposition:[72]

For the purposes of the ACL and Fair Trading Act a business may be carried on well before the point at which it begins to generate income; the business starts when preparatory activities are undertaken with a view to the generation of income. The temporal element of ‘carry on a business’ depends upon the context in which it appears; the time at which a business commences being carried on will vary depending on whether the phrase appears in a restrictive covenant or a taxation statute. In the current context, it would be contrary to the remedial purpose of consumer protection and fair trading legislation to exclude preparatory activities from the carrying on of a business. [Khan v Miah [2000] 1 WLR 2123; cf Pioneer Concrete Services Ltd v Galli [1985] VR 675, 705-706].

If Khan’s case did actually support the plaintiff’s proposition, it might be thought to be at odds with the authorities to which reference has been made. It is, however, consistent with these authorities and does not support the plaintiff’s proposition in any way relevant to the present proceedings.

[71][2000] 1 WLR 2123.

[72]Plaintiff’s Submissions, [23].

The question on appeal in Khan v Miah[73] was whether the parties ever carried on a business in partnership together. The parties had agreed to become partners in the business of an Indian restaurant. In finding that the partnership had commenced, Lord Millett said:[74]

Whether parties who propose entering into a business venture in partnership together have actually done so is a question of fact into which your Lordships would not normally enter. But the majority of the Court of Appeal did not reverse the judge’s findings of fact. They reversed his conclusions because they considered that there was a rule of law that the parties to a joint venture do not become partners until actual trading commences. They recognised the distinction between a contemplated partnership or an agreement to become partners and the partnership itself. They considered that it was necessary first to identify the business that it was intended or agreed should be conducted by the partnership, and then decide whether that business was being carried on by the partners at the material time. They identified the business of the partnership as the carrying on of a restaurant business from the premises in Newbury, and posed the question, at p 486H: “were the four parties … carrying on a restaurant business at [the premises] prior to 25 January 1994?”. So expressed, the question could only be answered in one way. The restaurant was not open for business. There was nothing for the first defendant to manage, and no function for the two chefs to perform. No food had been bought or bookings taken. Everything that had been done was preparatory to the commencement of trading.
…
There is no rule of law that the parties to a joint venture do not become partners until actual trading commences. The rule is that persons who agree to carry on a business activity as a joint venture do not become partners until they actually embark on the activity in question. It is necessary to identify the venture in order to decide whether the parties have actually embarked upon it, but it is not necessary to attach any particular name to it. Any commercial activity which is capable of being carried on by an individual is capable of being carried on in partnership. Many businesses require a great deal of expenditure to be incurred before trading commences. Films, for example, are commonly (for tax reasons) produced by limited partnerships. The making of a film is a business activity, at least if it is genuinely conducted with a view of profit. But the film rights have to be bought, the script commissioned, locations found, the director, actors and cameramen engaged, and the studio hired, long before the cameras start to roll.
The work of finding, acquiring and fitting out a shop or restaurant begins long before the premises are open for business and the first customers walk through the door. Such work is undertaken with a view of profit, and may be undertaken as well by partners as by a sole trader.
…
The question in the present case is not whether the parties “had so far advanced towards the establishment of a restaurant as properly to be described as having entered upon the trade of running a restaurant”, for it does not matter how the enterprise should properly be described. The question is whether they had actually embarked upon the venture on which they had agreed. The mutual rights and obligations of the parties do not depend on whether their relationship broke up the day before or the day after they opened the restaurant, but on whether it broke up before or after they actually transacted any business of the joint venture. The question is not whether the restaurant had commenced trading, but whether the parties had done enough to be found to have commenced the joint enterprise in which they had agreed to engage. Once the judge found that the assets had been acquired, the liabilities incurred and the expenditure laid out in the course of the joint venture and with the authority of all parties, the conclusion inevitably followed.

[73][2000] 1 WLR 2123 at 2125 (Lord Millett, with whom Lords Bingham of Cornhill, Steyn, Hoffman and Clyde agreed).

[74][2000] 1 WLR 2123 at 2126-8.

As is clear from careful consideration of Khan’s case, their Lordships were considering whether, in the context of a particular partnership agreement, the partnership venture had commenced. This is an entirely different issue from any relevant issue in the present proceedings – and also one entirely different from the relevant issues considered in the authorities to which reference has been made.

The third limitation inherent in these provisions is that the activity in the course of which the impugned conduct occurs must properly be characterised as ‘carrying on a business’. The term ‘business’ is undefined except to the extent that sub-s 2(1) of the ACL provides that the term ‘business’ includes a business not carried on for profit; a definition that applies to the ACL Victoria under the provisions of sub-s 3(2) of that Act. Otherwise, the term is a ‘wide and general’ word.[75]
[75]NT Power Generation v Power and Water Authority (2004) 219 CLR 90 at 116, [66] (McHugh ACJ, Gummow, Callinan and Heydon JJ).

Nevertheless, the meaning of the term ‘business’ is not unlimited or at large having regard to numerous authorities in which the courts have considered whether activities asserted to be the carrying on of a business can be described as such. In my view, the following propositions which the State submits emerge from the decided cases are both accurately stated and relevant and applicable in the present context:[76]

(a)For activities to constitute ‘carrying on a business’, the activities must be undertaken in a commercial enterprise or as a going concern.[77] The activities must constitute trade, or commercial transactions or engagements.[78] A business activity is an activity which takes place in a business context and which, of itself, bears a business character.[79]
(b)The expression ‘carry on a business’ signifies a course of conduct involving the performance of a succession of acts with system and regularity, not the effecting of a solitary transaction.[80] The less commercial the character and objectives of an organisation, the greater the degree of system and regularity required to establish that it carries on a business.[81]
(c)On the other hand, mere repetitiveness is insufficient. It does not necessarily follow that one who engages in transactions of the same kind systematically or regularly is carrying on a business in those transactions (eg regular deposits into a bank account). Absence of a system and regularity might deny that a business is being carried on but their presence does not necessarily establish that it is.[82]
(d)There is a distinction between those functions of a government which are purely governmental or regulatory and those functions which entail the carrying on of business.[83] To carry on some part of ‘the business of government’ is something different from carrying on a business in the relevant sense.[84]
(e)The carrying out of a function of government in the interests of the community, such as the performance of a statutory function (including one in respect of which fees may be charged), is not the carrying on of a business.[85] That the purpose of the activities is the provision of governmental services will tend against a conclusion that they amount to the carrying on of a business.[86]
(f)There must be present some element of commerce or trade such as a private citizen or trader might undertake.[87]

[76]First Defendant’s Submissions (22 August 2014) (‘the State’s Submissions’), [29].

[77]Corrections Corporation of Australia Pty Ltd v The Commonwealth (2000) 104 FCR 448 at 451, [12] (Finkelstein J); Saitta Pty Ltd v The Commonwealth (2001) 162 FLR 35 at 39, [28] (Beach J); Sirway Asia Pacific Pty Ltd v The Commonwealth [2002] FCA 1152 at [51] (Sundberg J); Village Building Co Ltd v Canberra International Airport Pty Ltd (No 2) (2004) 134 FCR 422 at 445, [90] (Finn J); Roads and Maritime Services v Devine Marine Group Pty Ltd [2013] NSWSC 1467 at [133] (Stevenson J).

[78]Durant v Greiner (1990) 21 NSWLR 119 at 128 (Rolfe J); Fasold v Roberts (1997) 70 FCR 489 at 524 (Sackville J); Paramedical Services Pty Ltd v Ambulance Service (NSW) (1999) 217 ALR 502 at 517, [86] (Hely J).

[79]Paramedical Services Pty Ltd v Ambulance Service (NSW) (1999) 217 ALR 502 at 517, [86], [88] (Hely J); Village Building Co Ltd v Canberra International Airport Pty Ltd (No 2) (2004) 134 FCR 422 at 445, [90] (Finn J); Markit Pty Ltd v Commissioner of Taxation (Cth) [2007] 1 Qd R 253 at 257, [30] (Muir J).

[80]J S McMillan (1997) 77 FCR 337 at 354 (Emmett J); Fasold v Roberts (1997) 70 FCR 489 at 524 (Sackville J); Sirway Asia Pacific Pty Ltd v The Commonwealth [2002] FCA 1152 at [52] (Sundberg J); New South Wales v RT & YE Falls Investments Pty Ltd (2003) 57 NSWLR 1 at 34, [131] (Hodgson JA); Village Building Co Ltd v Canberra International Airport Pty Ltd (No 2) (2004) 134 FCR 422 at 445, [90] (Finn J).

[81]Fasold v Roberts (1997) 70 FCR 489 at 525 (Sackville J); Paramedical Services Pty Ltd v Ambulance Service (NSW) (1999) 217 ALR 502 at 518, [86] (Hely J); Sirway Asia Pacific Pty Ltd v The Commonwealth [2002] FCA 1152 at [52] (Sundberg J).

[82]J S McMillan Pty Ltd (1997) 77 FCR 337 at 354; Sirway Asia Pacific Pty Ltd v The Commonwealth [2002] FCA 1152 at [52] (Sundberg J); Village Building Co Ltd v Canberra International Airport Pty Ltd (No 2) (2004) 134 FCR 422 at 445, [90] (Finn J); Markit Pty Ltd v Commissioner of Taxation (Cth) [2007] 1 Qd R 253 at 257, [30] (Muir J).

[83]J S McMillan Pty Ltd (1997) 77 FCR 337 at 355 (Emmett J); Sirway Asia Pacific Pty Ltd v The Commonwealth [2002] FCA 1152 at [53] (Sundberg J).

[84]Markit Pty Ltd v Commissioner of Taxation (Cth) [2007] 1 Qd R 253 at 257 – 258, [32] (Muir J), quoting from Town Investments Ltd v Department of the Environment [1978] AC 359.

[85]Sirway Asia Pacific Pty Ltd v The Commonwealth [2002] FCA 1152 at [53] (Sundberg J), citing Mid Density Development Pty Ltd v Rockdale Municipal Council (1992) 39 FCR 579 at 585; New South Wales v RT & YE Falls Investments Pty Ltd (2003) 57 NSWLR 1 at 34, [134] (Hodgson JA); Village Building Co Ltd v Canberra International Airport Pty Ltd (No 2) (2004) 134 FCR 422 at 445, [90] (Finn J); Markit Pty Ltd v Commissioner of Taxation (Cth) [2007] 1 Qd R 253 at 257, [30] (Muir J).

(iii) the Representations were made to manage the commercial risk of public opposition to the Project and to build support for the Project;[230] and

(iv) the Representations were made by the Authority in the discharge of its inherently commercial object and function.[231]

[229]Plaintiff’s Submissions, [57].

[230]Plaintiff’s Submissions, [58].

[231]Plaintiff’s Submissions, [59]. In this context I note also the plaintiff’s submission (Submissions of the Plaintiff – Separate Questions (22 August 2014), [53]) that:

“Conduct towards tenderers in the course of a tender process is conduct in trade or commerce, regardless of whether the body calling for tenders must take into account matters other than profit: JS McMillan Pty Ltd v Commonwealth (1997) 77 FCR 337, 354; Dockpride Pty Ltd v Subiaco Redevelopment Authority [2005] WASC 211, [208].”

The circumstances of the authorities relied upon in support of this submission were, however, relevantly different from those in the present proceedings insofar as they are relevant to the plaintiff’s pleaded case.

In my opinion, the Representations are not promotional activities as contended for by the plaintiff. It is evident that the Representations are directed to the commercial viability of the Project. However, this does not necessarily imbue the conduct with a trading or commercial character. Governments routinely make announcements about the cost, and viability, of public works. Such announcements are designed to inform the public of the cost of the project to the public, and reassure the public that those costs are not wasted, that the project will not become a burden on the public revenue, and that some or all of the costs may be recouped. It does not follow that such an announcement is promotional of trade or commerce, in the same manner as the advertisement in Tobacco Institute of Australia Ltd, or the comments of the Registrar of Building Societies, Attorney-General and Treasurer in Meadow Gem Pty Ltd.

Additionally, in those cases, the trade or commerce being promoted existed at the time of the promotional representation. In this case, there is no trade, commerce or business being conducted at this time. To the extent that Representations are promotional, they are promotional with respect to the viability of public works, and not with respect to trade or commerce, or an ongoing business. Likewise, it is evident that the Representations are being made to the public, and that the public will be the users and customers of the tollway. But it does not follow that the Representations will or are intended to promote the use of the tollway by the public. There is no basis in terms of the Representations as alleged for concluding that they were designed or intended to affect the number of members of the public using the road once it opens. Consequently, it cannot be said that the Representations would or are intended to promote use of the road, hence, an increase in toll revenue, and are thus not promotional of any business. Moreover, common experience would suggest that people decide whether or not to utilize a toll road because it serves their travel plans and the user price, the toll, is attractive in terms of its absolute level and having regard to time saving and vehicle running costs. It is fanciful to suggest that any significant number of people would or would not use a toll road depending on whether or not they thought it was a “good” project.

Having regard to the authorities which have been considered in relation to the meaning of the expression ‘in trade or commerce’, temporal aspects and the necessary commercial character, I am of the view that none of the conduct on the part of the State, aside from the conduct of the State through the Authority, which the plaintiff seeks to impugn can be said to be conduct ‘in trade or commerce’. In my view, the State’s contention that all lacked the commercial character necessary to fall within that expression is correct. As the State submits, even if the Representations were made in the course of conducting the business of operating a tollway, which in any event the State denies, were to be ‘in trade or commerce’, that business has not yet commenced. Thus, all of the impugned conduct precedes any activity or transaction which bears a trading or commercial character. Moreover, so far as the media releases and letters to members of the public are concerned, these are clearly political in nature and not part of any activity which bears a trading or commercial character.

From the perspective of the Authority, its activities (which have been considered with respect to the carrying on business question) relate primarily to the facilitation of the development, delivery and operation of a public roadway pursuant to statutory powers and duties. As discussed previously, these activities are the function of government, rather than trade or commerce.[232]
[232]Powell v State of Tasmania (2001) 10 Tas R 283 at 301, [47].

The statutory foundation for the Authority’s activities also reduces the significance of the tollway proposal with respect to the plaintiff’s ‘preparatory conduct’ argument. Moreover, the plaintiff’s submission that the Authority has inherently commercial objects and functions must be rejected.

The tollway is one of the proposed means by which the State may fund in part the delivery of the Project.[233] This funding method is an example of the user-pays principle – the application of which does not detract from the position that the tollway proposed will be the result of governmental activity in the interests of the community, including the users of the roadway. In my view, this is clear as a general proposition and, further, there is no question that, whatever funding method is adopted, the Project is being planned and delivered, in the view of the State and the Authority, in the interests of all Victorians.[234] As these proceedings indicate, there may well be different views in the community as to whether or not this is the case but, nevertheless, there is no basis for any contrary conclusion in the present proceedings. In any event, if the funding for the Project stems in part from the use of an income generating tollway, that funding source does not alter the Project’s character as a piece of public infrastructure delivered in the interests of the community. Neither does it impinge upon or alter the core function of the Authority, which has already been considered in the context of relevant statutory provisions.[235]
[233]See for example the ‘Invitation for Expressions of Interest’ [AB 428], particularly at [AB 441-442].
[234]See ss 1 and 6-13 of the TI Act.
[235]See above, [24] – [31].

The Authority also makes the point (as does the State, as indicated previously) that at its highest, the impugned conduct is incidental to future commercial activities, though it is the Authority’s position that this conduct is not even preparatory to future trade or commerce.[236] Significantly, it is contended, those future commercial activities are incidental to the Authority’s non-commercial object.[237]
[236]Concrete Constructions (NSW) Pty Ltd v Nelson (1990) 169 CLR 594 at 604.
[237]See the analogous reasoning in Fasold v Roberts (1997) 70 FCR 489 at 525 (lines F to G); and a similar approach is reflected in Sundberg J’s identification of the ‘core function’ of the respondent in Sirway Asia Pacific Pty Ltd v Commonwealth of Australia [2002] FCA 1152 at [58].

Consequently, I accept on the basis of the authorities to which reference has been made and for the reasons advanced by the Authority in its submissions, that the impugned conduct on the part of the Authority is not conduct ‘in trade or commerce’.

Finally, I am of the opinion that the publication of the relevant documents by the Authority is not properly characterised as its engaging in promotional activities which bear a trading or commercial character. I accept that this follows from the following matters raised by the Authority in its submissions:

(a)The CIS was produced and published in accordance with the planning scheme requirements embodied in the MTPF Act.
(b)The Transport Summary Report summarises the traffic and transport contents of the CIS. Like the CIS, this document does not promote a future ‘business’.
(c)The publication of these documents accords with the principle of transparency to which s 21 of the TI Act refers.
(d)The Executive Summary is not a promotional document. The contents of that document which the Authority relies upon for this proposition have previously been set out.[238]

In my view, these matters indicate very clearly that this is an entirely different situation from that considered in Tobacco Institute of Australia Limited v Australian Federation of Consumer Organisations Inc[239] where Hill J said:[240]
The present advertisement was not placed in one newspaper as an isolated incident. It was but one advertisement placed in a number of newspapers at the same time. The subject-matter of the advertisement is also of significance. Publication followed, so it was said by the appellant from the Bar table (the evidence before the court is not strong in the matter), the very public debate on passive smoking. The advertisement was not intended as a learned contribution to a scientific debate. It was not published in a learned scientific journal. It was directed to the public at large, smokers and non-smokers. It was couched in language designed to persuade, rather than to instruct. It seems highly unlikely that a corporation, lacking a significant commercial interest in the tobacco industry, would have gone to the expense of publishing advertisements in various newspapers of national circulation merely to influence public opinion on a debate of health policy. Rather it may be inferred, that the corporation which placed the advertisement did so to allay the fears of those who smoked and thus discouraged them from quitting and to discourage those who did not smoke from applying pressure on those who did to reduce the occasions on which they smoked, or perhaps give up altogether. In either way the advertisement on its face was designed either to promote the further sale of cigarettes or to arrest a decline in such sales.

[238]See above, [11].

[239](1992) 38 FCR 1 (FC).

[240](1992) 38 FCR 1 at 43 – 44.

For these reasons, I am satisfied that the Authority published the documents in question in discharge of statutory obligations and that their publication has not occurred in a business or commercial context.[241] Moreover, to the extent that the plaintiff relies on the ‘potential’ for trade or commerce, such potential is insufficient to render their publication as being ‘in trade or commerce’ for the purposes of s 18 of the ACL.
[241]See for example Chapman v Luminis Pty Ltd (No 5) (2001) 123 FCR 62 at 109, [178] and Commonwealth of Australia v Griffiths (2007) 70 NSWLR 268 at 298.

For the preceding reasons, I am of the opinion that the answers to the second of the separate questions, the “trade and commerce” question, must be “No”.

Relief sought

The question whether, if either or both of the defendants made the representations alleged in paragraphs 21, 25, 29 and 33 of the FASOC, a basis is provided for a final injunction in the form sought by the plaintiff, is the subject of the third of the separate questions, which is in the following terms:

(3)Assuming that each Defendant made each of the Representations in contravention of s 18 of the ACL (as alleged in paragraphs 37 of the FASOC) (which is not admitted for the purpose of the trial of the separate questions), should a final injunction in the form of that sought in paragraphs B(b) and B(c) of the Prayer for Relief in the FASOC be given?

The relief sought, relevant to this third separate question, is set out in the prayer for relief contained in the FASOC in the following terms, in the context of paragraph B of the prayer:

B.Interlocutory and final injunctions restraining the State and the Authority from:
(a)publishing, relying on or otherwise making or relying upon any of the Representations, or one or more of the Representations, in trade or commerce, including:
(i)in the tendering process for the Project; and
(ii)in seeking funding and financing for the Project.

(b)entering into a contract with any third party in relation to the Project, including for the construction, funding or operation of the Tollway, in circumstances where the State and/or Authority has made the Representations (or one or more of the Representations) to the third party in the course, or for the purposes, of the procurement process.
~~(b)~~(c) proceeding to further implement or carry into effect the Project based upon a business case containing one or more of the Representations.

It is clear from the authorities that a final injunction granted by the Court should not be expressed in terms which are too broad and that, in particular, the injunction should bear upon the case proven and indicate clearly the conduct which is enjoined in a way which enables the party enjoined to know what, as a matter of fact, is expected of that party.[242]
[242]See, for example, Melway Publishing Pty Ltd v Robert Hicks Pty Ltd (2001) 205 CLR 1; BMW Aust Ltd v ACCC (2004) 207 ALR 452; ICI Aust Operations Pty Ltd v TPC (1992) 38 FCR 248 and ACCC v Francis (2004) 142 FCR 1.

In relation to the terms or scope of the injunction sought, the State does, in my view, properly observe that there is some difficulty in understanding them in this respect. More specifically, the State submits:[243]

(a)Paragraph B(b) is drafted in very broad terms. It does not specify a particular contract, or a particular third party, to which it would apply. Rather, it refers to “a contract” with “any third party”. Moreover, it would apply (again, very broadly) to a contract with any third party “in relation to the Project”, with the only ostensible limitation being “in circumstances where the State and/or the [LMA] has made the Representations (or one or more of the Representations) to the third party in the course, or for the purposes, of the procurement process”. Paragraph B(b) is so broadly framed it cannot be said to have identified with adequate specificity the conduct to be restrained.
(b)Paragraph B(c) suffers from the same vice. It is unclear what is meant by “further implement” or “carry into effect”, let alone what it might mean to do those things “based upon” a business case containing one or more of the Representations.

[243]State’s Submissions [45].

In any event, regardless of the precise extent of the injunctions sought, they would not, in my view, be available to the plaintiff even if the contraventions alleged were to be made out. Section 232(1) of the ACL provides that the Court ‘may grant an injunction, in such terms as the court considers appropriate, if the court is satisfied that a person has engaged, or is proposing to engage, in conduct that constitutes or would constitute “a contravention of various provisions of that legislation, including a provision of Chapter 2, in which s 18 is to be found”’.[244]
[244]Section 201 of the ACL Victoria is to like effect.

Sub-sections 232(4) and (5) contain particular provisions addressed to the grant of an injunction restraining a person from engaging in conduct and restraining a person from carrying on a business, respectively. These provisions are in the following terms:

(4)The power of the court to grant an injunction under subsection (1) restraining a person from engaging in conduct may be exercised:
(a)whether or not it appears to the court that the person intends to engage again, or to continue to engage, in conduct of a kind referred to in that subsection; and
(b)whether or not the person has previously engaged in conduct of that kind; and
(c)whether or not there is an imminent danger of substantial damage to any other person if the person engages in conduct of that kind.

(5)Without limiting subsection (1), the court may grant an injunction under that subsection restraining a person from carrying on a business or supplying goods or services (whether or not as part of, or incidental to, the carrying on of another business):
(a)for a specified period; or
(b)except on specified terms and conditions.

Clearly, the power conferred under s 232 is broadly framed, but, as the authorities indicate, the power is subject to some limitations.[245] These limitations are to be understood in light of the case law that developed in relation to s 80 of the TPA.[246] The limitations of particular relevance in the present circumstances are that the relief should be designed to prevent a repetition of the contravening conduct and, further, that there must be a ‘sufficient nexus’ or relationship between the contravention and the injunction granted.
[245]See, eg, Australian Competition and Consumer Commission v Artorios Ink Co Pty Ltd (No 2) [2013] FCA 1292 at [50] (Mortimer J).
[246]The relevance of case law concerning s 80 of the TPA to decisions concerning s 232 of the ACL was noted by Mortimer J in ACCC v Artorios Ink (No 2) [2013] FCA 1292 at [48].

Before turning to these particular limitations, it is convenient and helpful to refer to an aspect of the Authority’s submissions with respect to this question which address the nature and utility of relief of this kind:[247]
[247]Authority’s Submissions [62] to [64] (emphasis supplied in the Submissions).

62.In this case, the plaintiff has emphasised his standing to seek relief for contraventions of s 18 of the ACL. In this regard, on different occasions, he has referred the Court to the High Court’s decision in Truth About Motorways Pty Ltd v Macquarie Infrastructure Investment Management Ltd (2000) 200 CLR 591 (‘Truth About Motorways’).[248] There is no dispute in this regard.
[248]See for example the plaintiff’s submissions at the hearings on 19 May 2014 (transcript p 2) and 1 August 2014 (transcript p 32).
63.However, Truth About Motorways also bears on the question of relief. In that case, Gummow J dealt with the question of relief.[249] His Honour said:
[249]Truth About Motorways Pty Ltd v Macquarie Infrastructure Investment Management Ltd (2000) 200 CLR 591 at 623.
In many cases, the remedy sought under s 80 for a prohibitory injunction would have the character of enforcing present compliance or inducing future compliance with the norm of conduct imposed by s 52, and a declaration would provide consequential relief. In the present case, the mandatory injunction sought would be apt to counterbalance the injury to the public interest allegedly sustained by the publication of the Statement.
64.The plaintiff accepts the significance of these principles to the question of relief. In this regard, the LMA refers to one exchange at the hearing on 1 August 2014.[250] On that occasion, the following exchange occurred (underlining added):
MS RICHARDS: A member of the public, as much as anyone, it is a public right not to have a government engaged in carrying on a business, to misrepresent the benefits of a project when the public are being looked to, to fund that project.
HIS HONOUR: So you’re saying that if – and speaking generally, if a government made a representation to a contractor in relation to a project which a member of the public thought or sought to establish it was misleading or deceptive. That was actionable, even though the contractor or potential contractor had no interest in pursuing that.
MS RICHARDS: Well, yes, that’s the conclusion that Truth About Motorways takes one to, Your Honour.

HIS HONOUR: Yes, all right.
MS RICHARDS: It may be a matter that bears on relief, but in terms of the lawfulness of the representation, it makes no matter.

[250]See the transcript at p 32 and 33.

On the basis of these submissions by the Authority, which I accept for the reasons on the basis of the material relied upon, the utility of granting the relief sought would have to be doubted. Nevertheless, for the reasons which follow, this issue does not arise because I am of the opinion that the answer to the third of the separate questions, the ‘relief sought’ question, must be ‘No’.

Preventing a repetition of the contravening conduct

In Australian Competition and Consumer Commission v Z-Tek Computer Pty Ltd,[251] Merkel J (as he then was) observed that:[252] ‘[i]t is within the scope and purpose of s 80 to grant injunctive relief which is designed to prevent a repetition of the conduct for which the relief is sought’. The Full Federal Court, in a subsequent decision, in BMW Australia Ltd v Australian Competition and Consumer Commission,[253] said:[254] “it is clear that the terms of any injunction based only on past conduct should be limited to restraining a repetition of precisely that conduct”. It has also been held that this limitation applies to s 232 of the ACL.[255] The basis of this limitation was explained by the Full Court of the Federal Court in Australian Competition and Consumer Commission v Dataline.Net.Au Pty Ltd as follows:[256]

The purpose of the injunction will be to prevent, or at least to reduce the likelihood of, future infringement. Past misconduct will be relevant to the likelihood of future misconduct, to the extent that it demonstrates a “propensity” or “inclination” to infringe the relevant legislation. In many cases past conduct will give an indication of future intention. In the absence of past misconduct, a court may nevertheless infer an intention to offend in the future, such inference being based on other evidence. In many, perhaps most, cases the possibility of future misconduct will be the underlying rationale for injunctive relief. In all cases the width of the relief will reflect the state of the evidence, including reasonable inferences which may be drawn from it. That is not to overlook the power to grant injunctive relief in the absence of any threatened future misconduct. Prevention of future misconduct may be the most common reason for granting injunctive relief, but there may be other reasons. The likely severity of the consequences of an improbable future breach may be an example. However, in all cases, the injunctive relief must relate to the TPA.

[251](1997) 78 FCR 197.

[252](1997) 78 FCR 197 at 203-204.

[253](2004) 207 ALR 452.

[254](2004) 207 ALR 452 at 465, [36] (Gray, Goldberg and Weinberg JJ).

[255]ACCC v Artorios Ink (No 2) [2013] FCA 1292 at [50] (Mortimer J).

[256](2007) 161 FCR 513 at 542 - 543 [108] (Moore, Dowsett and Greenwood JJ).

In my view, these authorities do support the State’s submission that an insuperable problem with paragraphs B(b) and B(c) of the plaintiff’s prayer for relief is that, contrary to what was said in these cases, the injunctive relief sought is not limited to restraining a repetition of any alleged contravening conduct. The alleged contravening conduct, as asserted by the plaintiff, concerns four representations which, on the plaintiff’s pleaded case, were made to the public or (in one case) by way of intergovernmental communication.[257] However, when one looks to paragraph B(b) of the prayer for relief, the plaintiff seeks to restrain entry into contracts with third parties. Moreover, paragraph B(c) would, if granted, restrain the State and the Authority from proceeding to further implement or carry into effect the Project. Thus, it is quite clear that the plaintiff is attempting to restrain classes of conduct that are entirely different from the contravening conduct alleged.
[257]See FASOC at [6], [14], [15], [21]-[22], [25]-[26], [29], [32]-[34].

The general approach of the plaintiff and the difficulties with the plaintiff’s case are also highlighted in the Authority’s submissions that the plaintiff’s case simply assumes that the impugned conduct has influenced, or will influence, the commercial conduct of third parties, including the Bidders. However, as the Authority submits, the facts pleaded in the Authority’s amended defence undermine this assumption.[258] Moreover, the Authority joins with and supports the State’s submissions in more general terms that the relief sought is cast well beyond the scope of the plaintiff’s case with respect to the impugned conduct.
[258]See the Authority’s Defence at [231A](f), [40] and [41] [AB 51, 63-64].

It follows, for the preceding reasons, that the separate question with respect to the relief sought should be answered in the negative. There are, however, further reasons, to which I now turn, which also require a negative response to this question.

‘Sufficient nexus requirement’

It is clear from the authorities that any injunctive relief must ‘relate to the TPA’ in the sense articulated by Gummow J in ICI Australia Operations Pty Ltd v Trade Practices Commission:[259]
[259](1992) 38 FCR 248 at 267 (citation omitted). This passage was cited with evident approval by Gummow, Hayne and Heydon JJ in Rural Press Ltd v Australian Competition and Consumer Commission (2003) 216 CLR 53 at 91, [91].

The power of the court to grant an injunction is controlled by the words “in such terms as the Court determines to be appropriate”.
Thus, the terms of the injunction will not be “appropriate” if, on its face, it operates upon a range of conduct some of which does, but some of which does not, have the relationship required by s 80 with contravention of the Act. The injunction should not prohibit conduct falling outside the boundaries drawn by s 80. The same limitation applies to mandatory injunctive relief. It is, in my view, no support for the grant of an injunction which, from the outset, has an operation outside the boundaries of s 80, to say that it is open for the party enjoined to apply under s 80(3) to vary the injunction so as to bring its operation wholly within proper limits. The party in question should not be placed under any such obligation in the first place.

The requirement of such a relationship has also been referred to as a ‘sufficient nexus’ requirement;[260] a requirement or limitation which also applies to s 232 of the ACL.[261] Moreover, in ACCC v Z-Tek Computer Pty Ltd, Merkel J (as he then was) both addressed the relationship requirements referred to by Gummow J in ICI and also explained and described the content of the ‘sufficient nexus’ requirement, as follows:[262]
The width of the power conferred by s 80 and its public interest character obviously give the Court great amplitude in determining appropriate injunctive orders in a particular case. However, there are limitations on the Court’s power under the section. Confinement of the power by reference to the scope and purpose of the TPA, and in particular s 80, is one limitation on the power. However, there are at least two further limitations. The power to make orders under s 80 is only enlivened in a proceeding which alleges that there has been a contravention of a provision of Part IV, IVA or V of the TPA. As was said by Gummow J in ICI at 267, the terms of an injunction granted under s 80 must, on their face, operate upon a range of conduct which has “the relationship required by s 80 with contravention of the Act”. Irrespective of whether the injunction is sought or granted under s 80(1) or 80(1AA) there must be a nexus between the conduct alleged or found to constitute the relevant contraventions and the injunctions granted.

Merkel J continued:[263]
[T]here must be a sufficient nexus or relationship between the contravention and the injunction granted. It is that nexus or relationship that enables determination by the Court of whether the injunction sought is “appropriate.”

The nexus requirement is ‘a specific reflection of Lockhart J’s insistence that the power [to grant injunctive relief] be exercised “judicially”’.[264]

[260]See, eg, Australian Competition and Consumer Commission v Albert (2005) 223 ALR 467 at 477, [40]-[41] (Jacobson J); Australian Competition and Consumer Commission v Real Estate Institute of Western Australia Inc (1999) 95 FCR 114 at 131, [39] (French J).

[261]ACCC v Artorios Ink (No 2) [2013] FCA 1292 at [50] (Mortimer J).

[262](1997) 78 FCR 197 at 202.

[263](1997) 78 FCR 197 at 204.

[264]Foster v Australian Competition and Consumer Commission (2006) 149 FCR 135 at 149, [35] (Ryan, Finn and Allsop JJ), referring to Lockhart J’s judgment in ICI (1992) 38 FCR 248 at 256 (with whom French J agreed).

The plaintiff acknowledges that the Court’s power to grant injunctive relief is constrained by the requirement for a nexus between the conduct alleged or found to constitute the relevant contravention, and the injunctions granted.[265] However, ‘[i]f the Court considers that an injunction that goes beyond the specific contraventions found is required to protect the public, it has the power to grant such an injunction.’[266] The plaintiff justifies the grant of the injunctions sought as follows:[267]
[265]Plaintiff’s Submissions, [68].
[266]Plaintiff’s Submissions, [69], referring to Foster v Australian Competition and Consumer Commission (2006) 149 FCR 135 at 147, [28], 149, [35]; Re McDougall (2006) 229 ALR 158 at 172 – 175, [64]- [72].
[267]Plaintiff’s Submissions, [70] – [71].

70. There is a nexus between the making of the Representations, including to the public at large, and the relief sought. The public are the investors in a substantial commercial project, and its ultimate users and customers. They have, it is to be assumed, been misled, by the State and the Authority, potentially in a very serious or significant way, as to the potential benefits of the project. There is a clear nexus between this conduct and both of the injunctions seeking to restrain the implementation of the Project.

71. Further, there is an obvious nexus between the making of the BCR representation, the Net Benefit representation and the Standard Methodology representation to the tenderers, and the injunctions sought to restrain implementation of the Project and the signing of contracts.

The plaintiff’s attempt to find any relevant nexus does, however, fail; both for the more particular reasons which follow and also on a more general basis. As to the latter, the nexus sought to be made is premised on the assumption or assertion which I have rejected, namely that the project is anything other than a function of government. Consequently, the analogy sought to be drawn between the citizens of the State and investors, users and customers, is unhelpful and at odds with the approach of the authorities which have been considered with respect to the functions of government. Moreover, the analogy is merely an assertion made without more – touch as it may on philosophical arguments as to the nature and functions of the state, which have been the subject of millennia of discourse. For similar reasons, the plaintiff’s case is not assisted by the broad assertion that there is a sufficient nexus on the basis that there is a need to protect the public at large.[268] Such an assertion, which is not anchored in the impugned conduct as pleaded, cannot provide any basis for a sufficient nexus.

[268]Transcript, page 87, lines 8 to 18.

In the State’s submission, the injunctive relief proposed by the plaintiff fails to satisfy the sufficient nexus requirement.

There is no real relationship between the making of the Representations to the public, and the entry into contracts with third parties by the State and, or alternatively, the Authority. The only connection between the alleged contravening conduct and the relief sought in paragraph B(b) is made through the inclusion of the words ‘in circumstances where the State and/or the [LMA] has made the Representations … to the third party in the course, or for the purposes, of the procurement process’. However, this is not a ‘sufficient nexus’. In any given case, if the State and, or alternatively, the Authority had made one or more of the Representations to the third party, the correct way to remedy the contravention would be through the making of a declaration of the kind sought by the plaintiff in paragraph A of the prayer for relief. An injunction preventing entry into the third party contract itself would bear no relationship to the allegedly contravening conduct.

Paragraph B(c), which would seek to restrain the State and the Authority from taking any further steps to implement the Project, is even more remarkable in its lack of connection between the contravening conduct and the relief sought. A ‘relationship’ between the contravening conduct and the relief sought is asserted in so far as the State and the Authority would be prevented from implementing the Project ‘based upon a business case containing one or more of the Representations’. However, this tenuous connection does not meet the description of a ‘sufficient nexus’. The implementation of the Project, which is sought to be restrained, cannot be said to involve any contravention of the ACL. To the extent that the relief is directed at restraining the making of the Representations in the context of a business case for the Project, there is again no real relationship between the pleaded conduct (involving the making of Representations to the public or, in one case, to the Commonwealth) and the conduct sought to be restrained (the making of representations to third parties in the context of a business case).

The combined effect of paragraphs B(b) and B(c), if granted, would be to prevent the State and the Authority from continuing with the Project. In Foster v ACCC, the Full Federal Court accepted that the power conferred by s 80 is wide enough to support ‘a complete prohibition, whether permanently or for a specified period, on a respondent’s engaging in a particular field of commercial activity or industry’, but made plain that injunctive relief framed this widely could only be warranted if ‘required to protect the public from conduct of the kind which constituted the contravention’.[269]
[269]Foster v ACCC (2006) 149 FCR 135 at 149, [35] (Ryan, Finn and Allsop JJ).

The proposed injunctions are not concerned with protecting the public from the conduct the subject of the FASOC or even conduct of that kind. Rather, the injunctions are directed to achieving a very different outcome – the scuttling of the Project altogether.[270] If the plaintiff succeeds in establishing that the Representations were made in contravention of s 18 of the ACL, the protection of the public from conduct of that kind would be achieved through the making of a declaration in the form described in paragraph A of the prayer for relief. The injunctions sought in paragraphs B(b) and B(c) are not necessary to achieve that purpose, and, indeed, are patently directed to a different purpose – one that is not authorised by s 232 of the ACL.
[270]In Truth About Motorways Pty Ltd v Macquarie Infrastructure Management, Gummow J spoke of the federal Parliament exercising its powers to create ‘new norms of conduct’ through s 52 of the TPA, and the power of the Parliament to adapt remedies in order to “enforce or induce compliance with the federal law: (2000) 200 CLR 591 at 622, [79]. Here, the remedy sought by the plaintiff in the form of the proposed injunctions is not concerned with enforcing present compliance or inducing future compliance with s 18 of the ACL, much less with ‘prevent[ing] …injury done by violation’ of the new norm of conduct. The ‘norm of conduct’ with which the plaintiff’s claim is concerned simply bears no relationship to the remedy he seeks.

The Authority also addresses the ‘nexus’ issue in practical terms:[271]

66.In practical terms, if granted, the relevant relief would bring the Project to an end. This relief sought goes much further than is necessary to remedy any injury to the public interest allegedly caused by challenged conduct (i.e. the publication of three documents as alleged). In the context of the comments of Gummow J in Truth About Motorways, the plaintiff over-reaches in seeking to prevent the signing of construction and finance contracts for the Project, or taking any step in furtherance of the Project consequent upon the alleged contravening conduct. If the contravening conduct is established, a mandatory injunction of the sought [sic] granted in Truth About Motorways, which had the effect of “correcting” the information contained in the misrepresentations, would be sufficient to “counterbalance the injury sustained to the public interest” by reason of any such misrepresentation.
67.Similarly, if the Court granted the relief sought at [B](a) of the Prayer, the LMA would have to withdraw and disavow publicly the limited set of documents on which the plaintiff’s case rests. The relief would prevent the repetition of the contravening conduct (and thereby uphold the norm of conduct for which s 18 of the ACL provides).

I accept these submissions on the basis of their reasoning and matters to which reference is made and also for the preceding reasons in these reasons for judgment.

[271]The Authority’s Submissions, [66] and [67].

For the preceding reasons there is, in my view, clearly no sufficient nexus between the conduct which the plaintiff seeks to impugn and the relief sought.

Conclusions and orders

As indicated in the preceding reasons, the answers to the separate questions are as follows:

(1)No;
(2)No; and
(3)No.

The parties are to bring in orders to give effect to these reasons. The question of costs is reserved.

[2014] VSC 404

10 September 2014