Murphy v Victoria

SUPREME COURT OF VICTORIA

COURT OF APPEAL

S APCI 2014 0117

ANTHONY MURPHY

Appellant

STATE OF VICTORIA

First Respondent

- and –

LINKING MELBOURNE AUTHORITY

Second Respondent

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JUDGES:	NETTLE AP, SANTAMARIA and BEACH JJA
WHERE HELD:	MELBOURNE
DATES OF HEARING:	22, 23 & 24 September 2014
DATE OF JUDGMENT:	29 September 2014
MEDIUM NEUTRAL CITATION:	[2014] VSCA 238
JUDGMENT APPEALED FROM:	Murphy v State of Victoria & Anor [2014] VSC 363 (Croft J) Murphy v State of Victoria & Anor(No 2) [2014] VSC 404 (Croft J)

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PRACTICE AND PROCEDURE – Preliminary questions – Order for trial of three questions before trial pursuant to Rule 47.04 of Supreme Court (General Civil Procedure) Rules 2005 – Questions directed to be decided on basis of facts admitted on pleadings – Whether facts sufficiently identified – Procedural fairness – Whether fair to try questions on facts admitted on pleadings notwithstanding seriously disputed questions of fact and plaintiff denied discovery of relevant documents – Whether fair to confine plaintiff to that part of pleaded case of which he was able to give particulars without discovery – Millar v Harper (1888) 38 Ch D 110; Spencer v The Commonwealth (2010) 241 CLR 118, referred to – Supreme Court (General Civil Procedure) Rules 2005, Rule 47.04 – Civil Procedure Act 2010 (Vic), s 8.

TRADE PRACTICES – Misleading or deceptive conduct – Application of Australian Consumer Law to Crown in right of State of Victoria – So far as carries on a business –Whether State carrying on business of planning, designing, financing and constructing motorway as tollway in public private partnership – In trade or commerce – Whether State making misleading representations in trade or commerce – Remedies – Injunction – Whether, if State making misleading representations in trade or commerce, injunction may go to restrain State’s entry into contract with successful tenderer for construction of motorway – NT Power Generation Pty Ltd v Power and Water Authority (2004) 219 CLR 29; ACCC v Real Estate Institute of Western Australia Inc (1999) 95 FCR 114, applied; J S McMillan Pty Ltd v Commonwealth of Australia (1997) 77 FCR 337; Khan v Miah [2000] 1 WLR 2123; Concrete Constructions (NSW) Pty Ltd v Nelson (1990) 169 CLR 594, considered; Pioneer Concrete Services Ltd v Galli [1985] VR 675, distinguished – Competition and Consumer Act 2010 (Cth), s 2B; Australian Consumer Law, ss 18 and 232; Trade Practices Act 1974 (Cth), s 2A.

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APPEARANCES:	Counsel	Solicitors
For the Appellant	Mr R Merkel QC with Ms S Gory	Fitzroy Legal Service
For the First Respondent	Mr M K Moshinsky QC with Ms K E Foley and Mr P D Herzfeld	Victorian Government Solicitor
For the Second Respondent	Mr N J Young QC with Mr R A Heath	Clayton Utz
Appearing by Leave for East West Connect	Mr M D Wyles QC	Freehills

NETTLE AP
SANTAMARIA JA
BEACH JA:

This is an appeal from a judgment given following the separate trial of three questions pursuant to Rule 47.04 of the Supreme Court (General Civil Procedure) Rules 2005. The appellant contends that the judge’s approach to the determination of the three questions was fundamentally flawed and resulted in an unfair hearing and determination of the appellant’s claims.

Background facts

The second respondent, Linking Melbourne Authority (‘LMA’), is a statutory corporation established under s 134 of the Transport Integration Act 2010 (‘the TIA’) and, perforce of s 135 of the TIA, represents the Crown in performing its functions and the exercise of its powers.

In or about May 2013, the first respondent, State of Victoria (‘the State’), announced that it would build the East West Link Stage One motorway (‘the Project’) as a public private partnership (‘PPP’), with financing sourced from the Victorian Government, the Commonwealth Government and the private sector, at an estimated capital cost of between $6 billion and $8 billion.

Between February 2012 and September 2013, the State with the assistance of LMA developed a detailed business case for the Project (‘the Detailed Business Case’) and, in May and June 2013, the State prepared a short form business case which was a summary of the Detailed Business Case (‘the Short Form Business Case’). On or about 28 June 2013, the State provided a copy of the Short Form Business Case to Infrastructure Australia together with completed Infrastructure Australia templates.

In or about July 2013, the State and LMA published an executive summary of the Short Form Business Case (‘the Business Case Summary’) together with a media release dated 1 July 2013 entitled ‘Benefits continue to flow from Melbourne’s East West Link tunnel’. Since July 2013, LMA has published the Business Case Summary on its website as a document entitled ‘East West Link Stage One Executive Summary – Short Form Business Case’. The publication of the Business Case Summary was among other things in furtherance of obtaining community engagement and support for the Project, as provided for in the Detailed Business Case.

The Business Case Summary states inter alia that:

1.The Tollway will be procured and delivered [sic] via an ‘Availability Payment Public Private Partnership (PPP) model, with PPP delivery of project assets and services and with tolls retained by the State.
2.The total cost of the Project is $6-8 billion.
3.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.
4.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.
5.Overall direction and oversight for the Project will be provided by a Steering Committee chaired by the Secretary Department of Transport, Planning and Local Infrastructure.
6.The Authority will manage the PPP procurement of the Tollway.
7.The Project will include commercial negotiations with Transurban for access via the City Link.
8.As a classified High Value/High Risk project, the Project is subject to the State’s Department of Treasury and Finance’s Gateway review process.
9.The Tollway has completed the first two stages/gates of the Gateway review process with funding approved in the recent Victorian State Budget.

In the first half of 2013, the State and LMA developed a reference design for the Project and, on 18 July 2013, the State through LMA invited construction and financing companies to express interest in relation to tendering for the motorway.

From 18 July 2013, a document entitled ‘Invitation for Expressions of Interest’ was published to registered users of the Tenders VIC website.

In or about September 2013, the State or LMA shortlisted three tenderers for the motorway, being East West Connect, Inner Link Group and Momentum Infrastructure.

The State and LMA are pursuing the procurement process for the Project in parallel with the statutory approval process under the Major Transport Projects Facilitation Act 2009 (‘the MTPF Act’). In particular, having released the request for tenders on 31 October 2013, the State and LMA are pursuing the following procurement process for the Project (‘the procurement process’):

1) The State proposes, on the recommendation of LMA, to appoint a contractor or contractors to finance, design, construct and operate the project as a Public Private Partnership with the State.

2) The appointment will be made pursuant to a Project Agreement between the State and the selected contractor or contractors.

3) LMA will administer the Project Agreement on behalf of the State.

4) The procurement process involves substantial expenditures by the State through LMA in respect of the tenderers, engineering tests (including drilling), acquisition or proposed acquisition of property and other matters involved in implementing the Project.

On 23 April 2014, the appellant filed and served a writ on both respondents alleging that they had made and are continuing to make representations in connection with the Project that are misleading or deceptive in contravention of s 18 of the Australian Consumer Law (‘ACL’) as applied in Victoria by the Australian Consumer Law and Fair Trading Act 2012 (Vic).

On 14 May 2014, the respondents sought orders that they be permitted to file partial defences (which did not require them to plead to the allegations that the representations were made or were misleading or deceptive) and that, pursuant to Rule 47.04, a trial of separate questions be held as to whether (assuming that the representations were made as alleged):

(a)they were made in the course of the respondents carrying on a business;
(b)they were made in trade and commerce; and
(c)whether, if so, injunction would go to restrain the State from entering into contracts in relation to the Project.

A first directions hearing took place on 19 May 2014. The State and LMA said that they would require 60 days to file complete defences and that the State would object to discovery of certain relevant documents on the grounds of public interest immunity. The State also announced that contracts for the Project were scheduled to be awarded in or about September or October 2014. The appellant objected to the idea of a trial of separate questions on the grounds that it would render the relief sought futile and sought orders that it be permitted to serve notices to produce before the close of pleadings to enable preparation towards a trial prior to the signing of contacts. On that day, the judge made orders for the filing of defences and any reply; for the filing by the appellant of notices to produce; and for the filing of any application by the respondents to set aside the notices to produce. The judge said that any objection to production would not be dependent on finalization of pleadings and therefore would allow adequate time for discovery. The respondents’ applications for the separate trial of questions and any application to set aside the notices to produce were adjourned to 11 July 2014.

On 13 June 2014, the appellant filed and served on the respondents notices to produce.

On or about 23 June 2014, LMA on behalf of the State shortlisted two tenderers for the Project, East West Connect and Inner Link Group and the State has agreed to reimburse the excluded third tenderer, Momentum Infrastructure, its costs of tendering for the Project up to a maximum of $12 million. Thereafter, the State or LMA entered into negotiations with one or more of the tenderers to finalize the contractual documents for the Project by a date not before 29 August 2014.

On 24 June 2014, the State applied to set aside the notices to produce on the grounds that they constituted an abuse of process, relevance and public interest immunity.

On 26 June 2014, LMA applied for orders that it be relieved from complying with the notices to produce until the pleadings had closed, or the respondents’ application for the separate trial of questions had been determined, or alternatively that the notices to produce be set aside in whole or part on the basis inter alia of public interest immunity and relevance.

On 30 June 2104, the Minister for Planning made an approval decision granting the applicable approvals for the Project, subject to the conditions set out in the approval decision. On the same day, the Minister for Planning published the Assessment Committee recommendation (being a written report to the Minister dated 30 May 2014 given pursuant to s 73(8) of the MTPF Act). On 8 July 2014, the respondents served their defences.

At a further directions hearing on 11 July 2014, the appellant sought and was granted leave to amend his statement of claim and sought to strike out the respondents’ defences in whole or part for their failure to plead to the substantive allegations made in the statement of claim. The judge determined that pleadings should be closed before he would consider ordering a separate trial of questions and that the question of public interest immunity should be dealt with after that. His Honour refused the appellant’s application that all matters including the alleged public interest immunity be dealt with at the next directions hearing. Subsequently, the respondents amended their defences, and the appellant applied to strike out the amended defences.

On 16 July 2014, orders were made for the filing of amended pleadings, the filing of the appellant’s strike out application, and the listing for hearing of the separate questions application and the strike out application.

On 1 August 2014, the judge heard the appellant’s application to strike out the respondents’ defences and the respondents’ application for separate trial of the questions. During that hearing, the appellant’s counsel stated that, before any separate trial of questions, the appellant wished to have discovery on the issues which were to be the subject of the separate questions and that the judge would need to determine the respondents’ claims of public interest immunity because the documents the subject of the notices to produce were central to the appellant’s case.

On 8 August 2014, the judge published his ruling. He dismissed the appellant’s application to strike out the respondents’ defences and ordered separate trial of the following three questions:

1) Assuming that each of the defendants made the representations alleged in paragraphs 21, 25, 29 and 33 of the Further Amended Statement of Claim (‘FASOC’), was that conduct engaged in as part of the carrying on of a business by the defendants (as alleged in paragraph 19 of the FASOC for the purposes of s 16 of the ACL (Question 1)?

2) Assuming each defendant made each of the representations, was that conduct in trade or commerce for the purposes of s 18 of the ACL (Question 2)?

3) Assuming that each defendant made each of the representations in contravention of s 18 of the ACL (as alleged in paragraph 37 of the FASOC) 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 (Question 3)?

When counsel for the appellant then asked the judge about discovery and the failure of the respondents to comply with the notices to produce, the judge stated that the separate trial of the three questions would proceed in accordance with his ruling on the basis of agreed facts or, failing agreement, on the pleadings and, therefore, that there would be no need for discovery or for the respondents to comply with the notices to produce.

On 15 August 2014, the appellant served replies to the amended defences in which he admitted some of the facts alleged and pleaded additional facts. Unsurprisingly, however, the parties were unable to agree on the facts.

The separate trial of the three questions was held on 25 and 26 August 2014. The appellant relied on the pleadings and thus those parts of the documents referred to in the pleadings which were available to the appellant. LMA provided some additional documents, to which all parties referred and from which the judge appears to have drawn inferences, although it was never made clear what function they were designed to serve. Given, however, that the trial was intended to be a trial on the pleadings, it is clear now that those documents should have been excluded.

On 10 September 2014, the judge gave judgment for the respondents in which he answered each question, No. [1]
[1][2014] VSC 404 (‘Second Reasons’)

On 16 September 2014, the appellant filed his notice of appeal and, after the matter came on for mention in this court on 17 September 2014, it was listed for hearing to begin on 22 September 2014 and was heard over that day and the following two days. Meanwhile, the State had finalized its tender negotiations and was intent on entering into a contract with the successful tenderer before the end of last week, with the object of commencing construction of the Tollway in late 2014 with an expected construction period of around five years.

The judge’s ruling

It is evident from the judge’s ruling of 8 August 2014[2] that his Honour was aware of the care which must be exercised before making an order for separate trial of discrete questions. He cited extensively from authority which, as his Honour said correctly, makes clear that:
[2][2014] VSC 363 (‘First Reasons’).

1)A separate trial should be ordered under r 47.04 only with great caution and only in a clear case.[3]
[3]Wells Fargo Bank Northwest National Association v Victoria Aircraft Leasing Ltd (No. 2) [2004] VSC 341 [181].
2)The attraction of trials of issues rather than of cases in their totality, ‘are often more chimerical than real’, so that separate trials should ‘only be embarked upon when their utility, economy and fairness to the parties are beyond question’.
3)The advantages of trying separate questions for one party may unfairly disadvantage another party, including because the questions will be determined without the benefit of all the evidence relevant to the proceeding.[4]
4)There should be no trial of a separate question on the basis of assumed facts unless the facts are agreed or can readily be determined judicially. Otherwise, the parties remain free to dispute the relevant facts at any later trial.[5]
5)As a general rule, it is inappropriate to order that a preliminary issue be isolated for determination unless the determination of the issue in favour of the plaintiff or the defendant will put an end to the action, or where there is a clear line of demarcation between issues and the determination of one issue in isolation from the other issues in the case is likely to save inconvenience and expense.[6]
6)Factors which tell against making order under r 47.04 include that the separate determination of the question:
a)may give rise to significant contested factual issues both at the time of the hearing of the preliminary question and at the time of trial;
b)may result in significant overlap between the evidence adduced on the hearing of the separate question and at trial; possibly involving the calling of the same witnesses at both stages of the hearing of the proceeding; and
c)may prolong rather than shorten the litigation.[7]

[4]Wardley Australia Ltd v Western Australia (1992) 175 CLR 514, 533–4.

[5]Jacobson v Ross [1995] 1 VR 337, 341–2 (Brooking J).

[6]Dunstan v Simmie & Co. Pty Ltd [1978] VR 669, 671.

[7]Reading Australia Pty Ltd v Australian Mutual Provident Society [1999] FCA 718, [8], cited in Village Building Company Limited v Canberra International Airport Pty Limited [2003] FCA 1195, [8].

The judge held, however, that it was appropriate to order a separate trial of the three questions because he considered that to do so would be akin to the approach adopted by Finn J in Village Building Company Ltd v Canberra International Airport Pty Ltd. As his Honour put it:

the separate questions hearing would last one or perhaps two days and could be prepared for and argued with approximately two weeks’ notice. These questions would, if answered as the defendants would have them answered, dispose of the proceeding. If they were answered otherwise, then the matter would proceed promptly to full trial, but with the advantage of the matters the subject of the separate questions having been canvassed and, in my view, with likely utility in terms of economy of time and cost in the event that the matter did proceed to full trial. The other advantage is that it would not, in my view, be necessary to deal with the public interest immunity claim prior to determination of the separate questions. The plaintiff does, however, not accept this position, but this follows, in my view, from his failure to accept the current state of the pleadings and that the pleadings in their current state provide a proper factual basis for determination of the preliminary questions on the approach applied by Finn J in the Village Building Company case and other cases to which reference has been made, namely, that the impugned conduct as pleaded can be established to have occurred. For the preceding reasons, this approach is not, in my opinion, properly criticised on the basis that it is some hypothetical determination of matters on the basis of assumed facts, but is rather a determination on the basis of the bases as pleaded by the parties. This approach also, in my view, disposes of the objection raised by the plaintiff that the determination of the preliminary questions would not be possible because the parties would not be able to agree the factual basis upon which that determination would take place. Quite apart from issues with respect to the obligations of parties under the Civil Procedure Act to facilitate civil proceedings — with particular reference to s 7 — the approach of Finn J and of the judges in the other authorities to which reference has been made does avoid these difficulties because in the absence of agreed facts the pleadings themselves provide the factual background, which is quite sufficient in the present circumstances for the determination of the preliminary questions.[8]

[8]First Reasons [61] (citations omitted).

Grounds 1 to 10 – Approach to determination of separate questions

Under cover of Grounds 1 to 10 of the appeal, the appellant contends that the judge erred in ordering the trial of the separate questions before discovery of documents relevant to those questions and before resolving the respondents’ claims to public interest immunity.

We agree. In this case, there were and are seriously disputed questions of fact. The appellant alleges and the respondents deny that the respondents are carrying on a business which includes the designing, funding, developing and procuring of the construction and operation of a motorway as a tollway in public private partnership with a private developer.[9] The appellant alleges and the respondents deny that the nature and extent of that business is such as to engage the operation of s 18 the ACL.[10] The appellant alleges and the respondents deny that the respondents have made and are continuing to make, in the course of carrying on the business in trade and commerce:

a)a misleading or deceptive representation that the Project will produce a Benefit Cost Ratio (BCR) of 1.4 (‘the BCR misrepresentation’);[11]
b)a misleading or deceptive representation that the Project will have a net economic benefit (in present value terms as at 2013) of $1.476 billion (‘the Net Benefit misrepresentation’);[12] and
c)a misleading or deceptive representation that the formal cost benefit analysis for the Project was carried out in accordance with standard methodology (‘the Standard Methodology misrepresentation’).[13]

[9]Further Amended Statement of Claim (‘FASC’) [19].

[10]FASC [20].

[11]FASC [21]–[24].

[12]FASC [25]–[28].

[13]FASC [33]–[36].

In our view, the range and complexity of the disputed facts rendered it inappropriate to proceed on the basis of only those facts which were admitted on the pleadings and, plainly, that was a fundamentally different way of approaching the matter than trying separate questions on the basis of evidence, in the usual way, as Finn J did in Village Building Company Ltd v Canberra International Airport Pty Ltd.[14]
[14][2003] FCA 1195.

As the appellant made clear in his submissions to the judge, although he relied on the documents referred to in the particulars given under each of the disputed allegations of fact in the FASOC, he did not limit his case to those documents. Rather, he put them forward as the best particulars he was able to provide in the absence of discovery; and thus, in effect, as instances of a broader range of activities which he perceived it would be found constituted the carrying on of the business which he alleged. It was for that reason that he sought discovery concerning the questions to be tried and determination of the respondents’ objections to produce documents in answer to the notices to produce, and contended that there should be no trial of the questions until and unless discovery had been given and the notices to produce had been answered.

The judge rejected that approach because his Honour considered that the appellant should be tied to the few instances of conduct of which he was able to give particulars without the aid of discovery. In his Honour’s words:

The defendants submit that, in any event, the reservation sought to be made by the plaintiff is inappropriate. It is, in my view, incompatible with the facilitation of the just, efficient, timely and cost-effective resolution of the real issues in dispute as required by s 7 of the Civil Procedure Act2010. Moreover, under s 19 of that Act, for the purpose of avoiding undue delay and expense, the plaintiff ‘must not take any step in connection with any claim or response to any claim in a civil proceeding unless the person reasonably believes that the step is necessary to facilitate the resolution or determination of the proceeding’. Additionally, the overarching obligation to ensure costs are reasonable and proportionate as provided for in that Act is also a significant and important consideration in favour of the applications for determination of the proposed separate questions.
For the reasons indicated previously, it is not open to the plaintiff to seek to avoid stating exhaustively the conduct upon which he relies, particularly in respect of the issues the subject of the first and second questions. In the first instance, the plaintiff must identify with the requisite degree of precision the conduct on which he relies. Given the objects of the Civil Procedure Act, and given the overarching obligations imposed by that Act, the plaintiff cannot maintain the reservation in the hope that further documents might emerge from the discovery process and, or alternatively, to resist the use of the preliminary trial procedure having regard to the likely savings in time and cost which would flow from its adoption, matters to which I now turn.[15]

[15]First Reasons [58]–[59].

With respect, however, we think that reasoning was misplaced. It is one thing to make an allegation without any basis for it - which is plainly impermissible - and quite another to make allegations - as the appellant did in this case — which ex facie were soundly based on the best particulars which could be given until after discovery (and which, it should be noted, were not sought to be struck out as being something else). In a case like this, where ex hypothesi the documents needed to prove the appellant’s allegations were within the respondents’ exclusive possession or power, and the respondents refused to produce them, the appellant not only had no option other than to plead his case as he did but was perfectly entitled to do so. The propriety of so proceeding is established by a long line of authority dating back to the nineteenth century.[16]
[16]See Millar v Harper (1888) 38 CH D 110, 112, Harvey v CSIRO [2000] 2 Qd R 594, [23]; Egg and Pulp Marketing Board v K H Tocumal Trading Co Pty Ltd [1963] VR 378, 381; Jingelic Mineral NL v Abigroup Ltd (1992) 7 WAR 566, 570; Trade Practices Commission v CC (New South Wales) Pty Ltd (1995) 58 FCR 562, 539 ; Spencer v Commonwealth (2010) 241 CLR 210, [31].

No doubt, as the judge said, a party to litigation ‘must not take any step in connection with any claim or response to any claim in a civil proceeding unless [that party] reasonably believes that the step is necessary to facilitate the resolution or determination of the proceeding’. But, in this case, the appellant did reasonably believe that the step of pleading his case as he did was necessary to facilitate the resolution or determination of the proceeding. Otherwise, he would have been deprived of the opportunity of establishing the truth as he perceived it to be.

No doubt, too, as the judge observed, the overarching obligation to ensure costs are reasonable and proportionate as provided for in the Civil Procedure Act 2010 is a significant and important consideration. But to foreclose a plaintiff’s opportunity of obtaining discovery from the State in order to prove a case which is ex facie implied by so many of the documents as are presently available to him would be to subvert the justice process. It would mean that, whenever the State is party to litigation of this kind, it could effectively eliminate the scrutiny of executive action which the curial process is calculated to deliver by the simple device of claiming public interest immunity and then pleading that the time required to determine the validity of that claim would add unacceptably to the costs and delays of the litigation. Whatever the cost savings and efficiencies which the Civil Procedure Act were designed to afford, we cannot accept that it was intended to go that far.

Moreover, as emerged in the course of oral argument, the number of documents in issue was relatively small. This is not a case like some which may be imagined where platoons of people are assigned to the discovery process and every issue about discovery and privilege is effectively a trial in itself. So far as can be told from the information available to us on the appeal, and counsel for the respondents did not suggest the contrary, the claim for public interest immunity could have been dealt with by the judge reading the documents in the privacy of his chambers followed by oral argument which would have taken up less than half a day. Given those circumstances, it is difficult to fathom why it was thought appropriate to confine the appellant to but a fraction of his pleaded case in the interests of costs and supposed efficiency. Surely the most cost effective and efficient manner of dealing with the matter was to resolve the claim for immunity, order discovery with respect to the three questions ordered to be tried under Rule 47.04 and then try those questions on the basis of evidence in the usual way, just as was done in Village.

As it is, because of the parties’ inability to agree on facts (which, as we have observed, was hardly surprising); the judge’s consequent order that the questions should be tried on the basis of the facts admitted on the pleadings; and then the judge’s adopting a course of relying also on facts and inferences drawn from the documents, no one could ever be sure of the facts on which the judge was proceeding until the judge published his reasons for judgment, and even now there is still some doubt about it. The consequences of having so proceeded are wholly unsatisfactory.

We are fortified in this view by the fact that, even at the hearing before this Court, the parties could not agree on the basis on which the hearing before the judge was conducted. Indeed, counsel for LMA specifically disagreed with counsel for the State on the basis on which the judge proceeded and the basis on which the judge used the various documents that were tendered before him. Whether the process adopted by his Honour was ‘akin to a demurrer’ (as submitted by the State) or ‘admitted pleadings plus tendered evidence’ (as submitted by LMA) or something else (as submitted by the appellant), the lack of any certainty as to these matters so far as the parties were concerned was not likely to be productive of a fair process.[17]
[17]T145.16 and T205.30–T206.4.

Possibly it is true to say, as counsel for the respondents contended, that the differences between the facts admitted on the pleadings and the facts on which the judge proceeded are de mininis and immaterial. Possibly, too, it would have made no difference to his Honour’s determination if he had confined himself to the facts admitted on the pleadings. But, even if that were so, and we are not convinced of it, it remains that, as a result of what has taken place, the appellant has had his case determined against him on a final basis upon a consideration of only part of his pleaded case, in circumstances where the documents which he sought to substantiate the remainder of it were denied to him on the basis of an untested assertion of public interest immunity.

Given, as we will explain, that the question whether the impugned representations were made by the respondents in the course of carrying on business (and in trade and commerce within the meaning of the Australian Consumer Law) is a question of fact and degree which turns on consideration of all of the relevant facts and circumstances, we have no doubt that the result of what has occurred has been to deny the appellant a fair hearing.

Accordingly, the judgment given below must be set aside and the matter must be remitted to the Trial Division for a rehearing.

Grounds 11 to 21 – Carrying on business

Under cover of Grounds 11 to 21 of appeal, counsel for the appellant submitted that the judge erred by failing to answer Question 1 in the terms in which it was posed, namely, whether the impugned representations were conduct engaged in as part of the carrying on of a business by either respondent, as alleged in paragraph 19 of the FASOC. Counsel contended that the judge should have considered whether the pleaded case was capable of establishing that the respondents were carrying on a business of that description and that the only permissible way in which his Honour could have approached the task was by first deciding whether the respondents were carrying on the business alleged and then deciding whether the impugned representations were made in the course of carrying on that business. As it was, counsel said, the judge conflated the two questions and thus decided a different question whether the making of the impugned representations was in the course of carrying on a business.[18]
[18]Second Reasons [44].

Given that the matter is to be remitted for a rehearing, it is inappropriate for us to express an opinion as to whether the judge was right or wrong in concluding that the respondents were not carrying on a business. Nevertheless, it may be of assistance to the judge who deals with the matter on remitter if we venture the following observations.

First, the judge considered that the following propositions were relevant and likely to be of assistance:

(a)For activities to constitute ‘carrying on a business’, the activities must be undertaken in a commercial enterprise or as a going concern.[19] The activities must constitute trade, or commercial transactions or
engagements.[20] A business activity is an activity which takes place in a business context and which, of itself, bears a business character.[21]
(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.[22] 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.[23]
(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.[24]
(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.[25] To carry on some part of ‘the business of government’ is something different from carrying on a business in the relevant sense.[26]
(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.[27] 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.[28]
(f)There must be present some element of commerce or trade such as a private citizen or trader might undertake.[29]

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

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

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

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

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

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

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

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

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

[28]New South Wales v RT & YE Falls Investments Pty Ltd (2003) 57 NSWLR 1, 34, [129] (Hodgson JA); Village Building Co Ltd v Canberra International Airport Pty Ltd (No 2) (2004) 134 FCR 422, 454, [90]; Markit Pty Ltd v Cmr of Taxation (Cth) [2007] 1 Qd R 253, 257, [30] (Muir J).

[29]New South Wales v RT & YE Falls Investments Pty Ltd (2003) 57 NSWLR 1, 34, [131] (Hodgson JA); Village Building Co Ltd v Canberra International Airport Pty Ltd (No 2) (2004) 134 FCR 422, 445, [90] (Finn J); Markit Pty Ltd v Cmr of Taxation (Cth) [2007] 1 Qd R 253, 257, [30] (Muir J).

With respect we do not disagree. It is, however, also necessary to bear in mind, as counsel for the appellant submitted, that the word ‘business’ is an ‘etymological chameleon’ which takes its meaning from the context in which it appears[30] and from the purpose of the statute in which it is found.[31] Thus, as the majority observed in NT Power Generation Pty Ltd v Power and Water Authority,[32] ‘business’ in the context of s 2A the Trade Practices Act 1974 was a wide and general word which was further widened by the inclusion in the definition of ‘business’ in s 4(1) of ‘a business not carried on for profit’. Ultimately, its meaning was informed by the purpose of s 2A of that Act which was to ensure that the Commonwealth Government should, in its commercial activities, be subject to the same regime as corporations.
[30]Town Investments Ltd v Department of the Environment [1978] AC 359, 383 (Lord Diplock).
[31]Northern Territory Power Generation Pty ltd v Power and Water Authority (2004) 219 CLR 90, 116[66].
[32]Ibid.

Similar considerations apply to ‘business’ in s 2B of the Competition and Consumer Act (2010) (Cth) and therefore in relation to s 18 of the ACL. It is a wide and general word, made wider still by the inclusion in the definition of ‘business’ in s 2 of the ACL of ‘a business not carried on for profit’, and its meaning is informed by the purpose of s 2B of the Competition and Consumer Act 2010 which is to ensure that the Crown in right of the State of Victoria should in its commercial activities be subject to the same regime as corporations and other private entities.

Secondly, based on observations of Emmet J in J S McMillan Pty Ltd v Commonwealth of Australia,[33] the judge identified what his Honour described as three important limitations inherent in s 18 of the ACL:

1)First, the focus must be on the impugned conduct: the impugned conduct must be engaged in in the course of carrying on the business.[34]
2)Secondly, and consequently, it is not sufficient that the impugned conduct be connected in some way with a business to be conducted by the State at some time in the future; and activities preparatory to the establishment of a business do not constitute the commencement of or the carrying on of a business.[35]
3)Thirdly, the activity in the course of which the impugned conduct occurs must properly be characterizable as ‘carrying on a business’.[36]

[33](1997) 77 FCR 337, 354.

[34]Second Reasons [43].

[35]Second Reasons [45].

[36]Second Reasons [50].

With respect, we do not disagree but we wish to add that considerable care should be taken when drawing the line between what the judge described a activities preparatory to the establishment of a business and acts which may in fact be done early on in the carrying on of the business.

The judge based his reasoning about activities preparatory to the establishment of a business on the following observations of the Full Court in Pioneer Concrete Services Ltd v Galli:[37]

The word ‘business’ frequently poses difficulties for the courts. As Lord Diplock said in Town Investments Ltd v Department of the Environment:[38] ‘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[39] 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,[40] 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)[41] 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.[42]
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;[43] Thomas v Federal Commissioner of Taxation[44] and Ferguson v Federal Commissioner of Taxation.[45] 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;[46] Birmingham and District Cattle By-Products Co Ltd v Inland Revenue Commissioners.[47] 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 which the State had carried 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.
None of the activities alleged against the respondents had gone beyond the preliminary stages and could not be characterized as the preparatory stages of setting up an identifiable business. The drilling was directed to ascertaining whether or not suitable stone was present and where it was located; the land which was to be quarried was not yet in the possession of the respondents; neither a town planning permit nor an extractive industry licence have been obtained; and no business entity to quarry the land had been set up. All this points to the conclusion that no business was yet in existence, nor could it reasonably be concluded that there would be a business by 22 December 1983. It is, however, unnecessary for us to identify at what point a business would have been set up or to decide whether and to what extent preparatory steps may be relied upon to demonstrate the existence of a business. [48]

[37][1989] VR 675.

[38][1978] AC 359, 383.

[39](1884) 27 Ch D 71, 88.

[40](1980) 144 CLR 1, 8–9; 29 ALR 577, 582–3.

[41](1880) 15 Ch D 247, 277-8.

[42][1985] VR 675, 706.

[43](1942) 2 AITR 360.

[44](1972) 46 ALJR 397.

[45](1979) 79 ATC 4261

[46](1919) 12 Tax Cas 92.

[47](1920) 12 Tax Cas 31.

[48][1985] VR 675, 705.

As counsel for the appellant pointed out, however, the Full Court in Pioneer was concerned with a restrictive covenant which prohibited the covenantors from either directly or indirectly carrying on or conducting or being engaged in or being concerned or interested in any of certain named kinds of business within a defined radius of the covenantee’s premises. The expression ‘carry on business’ took its meaning from that context and thus ultimately from the purpose of the covenant being to restrict the conduct of a businesses in competition with the covenantee’s business. Certainly, so far as Brooking J, who decided the case at first instance, was concerned, and with whom the Full Court said they agreed, that was an important consideration.[49]
[49][1985] VR 675, 696-7.

The considerations which apply here are different. As the Full Court also observed in Pioneer, in taxation law 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. Similarly in this context, where the object of s 18 (insofar as it applies to the State) is to prevent the State engaging in misleading and deceptive conduct in the course of carrying on a business, it may be assumed that s 18 is intended to apply from the earliest point of commencement of carrying on business. So, as counsel for the appellant submitted, just as a newly floated company which begins to lay out subscription moneys in the acquisition of assets with which to conduct its business may be conceived to have commenced carrying on a business of acquiring and operating those assets, so too might the State be regarded as beginning to carry on a business of constructing and operating an asset as soon as it starts to take steps to acquire the asset for the purposes of that operation.

Thirdly, for reasons which are not clear, the judge eschewed any decision as to whether the operation of the motorway would constitute the carrying on of a business; and thus, as we read his Honour’s reasons, eschewed deciding at what point in the process of designing, constructing and operating the motorway the State might commence to carry on that business.[50] In passing, however, his Honour described the decision of the House of Lords in Khan v Miah[51] as dealing only with the question when a partnership had commenced, as opposed to when the partnership commenced to carry on business, and thus as being irrelevant to the determination of this case. As his Honour put it:

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.[52]

[50]Second Reasons [63].

[51][2000] 1 WLR 2123.

[52]Second Reasons, [49].

With respect, we disagree. As Lord Millett[53] said:

The question [of whether the partnership in question had been created] turns on whether they [the parties] actually started to carry on the business prior to 26 January 1994.
…
I think the majority of the Court of Appeal [who held that the business had not actually started] were guilty of nominalism… They described the business which the parties agreed to carry on together as the business of a restaurant, meaning the preparation and serving of meals to customers, and asked themselves whether the restaurant had commenced trading by the relevant date. But this was an impossibly narrow view of the enterprise on which the parties agreed to embark. They did not intend to become partners in an existing business. The did not agree merely to take over and run a restaurant. They agreed to find suitable premises, fit them out as a restaurant and run the restaurant once they had set it up. The acquisition, conversion and fitting out of the premises and the purchase of furniture and equipment were all part of the joint venture, were undertaken with a view of ultimate profit, and formed part of the business which the parties agreed to carry on in partnership together.[54]

[53]With whom the other Law Lords all agreed.

[54][2000] 1 WLR 2123, 2125–2127 (emphasis added).

In our view, similar considerations would apply to the determination whether the State had commenced to carry on business in the context of s 18 of the ACL. Depending on the facts which are yet to be determined at trial, it is conceivable that the State might have commenced, or alternatively might yet commence, to carry on a business of designing, constructing and operating a motorway as a tollway for reward at some point before the tollway begins to operate.

Fourthly, in substance, the judge decided that the respondents did not make the impugned representations in the course of carrying on a business, on the basis of the distinction earlier referred to between functions of a government which are purely governmental or regulatory and those which entail the carrying on of business.[55] His Honour found on the basis of the limited facts admitted on the pleadings and such as he inferred from those of the relevant documents which were available that it was impossible to say that the making of the impugned representations was in the course of carrying on a business: because it was ‘scarcely credible’ that the State would provide the Business Case to Infrastructure Australia for anything other than a purely governmental purpose and because what his Honour found to be the State’s attempt to ‘inform and engage the community’ was ‘entirely consonant with the ordinary functions of government’. As his Honour put it:
[55]S McMillan Pty Ltd (1997) 77 FCR 337, 355 (Emmett J); Sirway Asia Pacific Pty Ltd v Commonwealth [2002] FCA 1152, [53] (Sundberg J).

The purpose of the publication of the Short Form Business Case to Infrastructure Australia is alleged by the State to be for the purpose of attracting Commonwealth Government funding. This is not admitted by the plaintiff, but in oral submissions the plaintiff clearly accepted that this was the position. Nonetheless, it is, in my view, a reasonable inference that the purpose of that publication was consistent with the functions of Infrastructure Australia under s 5 of the Infrastructure Australia Act 2008 (Cth), which have been set out previously. It is scarcely credible to suggest that the State would be providing information of this nature to a body with the functions of Infrastructure Australia for any other purpose. The State submits that the publication of the Short Form Business Case to Infrastructure Australia was ‘a purely intergovernmental communication’. In my view, there is nothing in the material before the court which suggests otherwise — particularly having regard to the nature of the parties to the communication and the provisions of the Infrastructure Australia Act 2008 (Cth), to which reference has been made. The plaintiff’s submission that the provisions of that legislation may also accommodate submissions by private entities does not detract from this position.
Moreover, the 1 July 2013 and 31 October 2013 media releases and the responsive letters by Ministers to members of the public are each suggestive of and supportive of the view that they pertain to the ordinary functions of government, which include informing the public of government decisions, seeking to persuade the public of the merits of those decisions, and responding to public concerns about those decisions. Indeed, in a democratic society, these would rank among the critical functions of government. The plaintiff submits, however, that ‘[t]here is also an ongoing community engagement program that extends beyond that required for the statutory approvals process’:
All that is known about the purpose of the community engagement program is that it was included in the detailed business case for the Project. It is a reasonable inference that the community engagement program is designed to promote the Project to all stakeholders in it (including the public as consumers ie customers in respect of the Project, and as the persons ultimately funding the Project on an ongoing basis) and manage the commercial risk of public opposition to the Project and to enhance public support for the Project.

Nevertheless, in my opinion, the State’s attempt to inform and engage the community is entirely consonant with the ordinary functions of government, both generally and in terms of the statutory approvals process, and devoid of any business or trading character.[56]
…
Moreover, the context in which these publications occurred does not, in any respect, suggest that they occurred in the course of carrying on a business. The clear context is the undertaking by the State of long-term very substantial infrastructure planning and development, which included the exercise of statutory powers of a regulatory kind. I accept that this is a distinctly governmental activity and is not an activity which a private citizen or trader might undertake. Having regard to the nature of the substantial infrastructure planning and development, it may be accepted, and is unsurprising, that part of the context involves the undertaking of a tender process. Nevertheless, the authorities make clear that representations made to tenderers within the context of a tender process, and while dealing with tenderers, do not constitute conduct in the course of carrying on a business, even if the thing tendered for will constitute a business once operational. Consequently, it is entirely inapt to characterise the conduct of the State, otherwise than through the Authority, which is relied upon by the plaintiff, as conduct in the course of carrying on a business, given that it does not involve any alleged representations to tenderers.
As submitted by the State, it may also be accepted that part of the context is that the Project will, in part, comprise a toll road, where it is intended that the toll revenues will be collected by the State. However, the State submits that even if operating the toll road would constitute the carrying on of a business by the State, that would not mean that the conduct of the State relied on by the plaintiff was conduct in the course of carrying on that business. The plaintiff submits, however, that the Representations were made in the course of carrying on a business:
[T]he making of the Representations to the public at large were steps taken to promote, and in furtherance of, the Project, inter alia in order to build support for, and to manage the commercial risk of, community and potential user opposition to the Project.

In my opinion, having regard to the preceding reasons and authorities to which reference has been made, it is impossible to say that, when the Representations were made, the State was carrying on that business.[57]

[56]Second Reasons [58]–[59].

[57]Second Reasons [60]–[62].

Since that issue must be retried on the basis of evidence after discovery and the resolution of the respondents’ objections to the notices to produce, it is not appropriate for us to express a view on it one way or the other. We do wish to say, however, that although we agree with the judge that, in order to constitute the carrying on of a business, the activities in question must present some element of commerce or trade such as a private citizen or trader might undertake; and that, as is established by authority, there is a distinction between those functions of a government which are purely governmental or regulatory and those which may entail the carrying on of business,[58] it is important to keep in mind that, in some cases, the two may co-exist. So, for example, while to plan and provide for the regulatory framework for the construction of State infrastructure might be thought to be a purely governmental or regulatory activity, whereas in contrast, as NT Power shows, to carry on of an operation for the generation and sale of electricity is regarded as essentially if not exclusively a commercial undertaking, between those extremities conceivably lies a range of possibilities of mixed governmental and business activities which, depending on all the facts and circumstances of the particular case, may yield a conclusion that the State is carrying on a business in conjunction with or at the same time as discharging its purely governmental functions.
[58]S McMillan Pty Ltd (1997) 77 FCR 337, 355 (Emmett J); Sirway Asia Pacific Pty Ltd v Commonwealth [2002] FCA 1152, [53] (Sundberg J).

Fifthly, as has been seen, the judge concluded that the State’s attempt to inform and engage the community was devoid of any business or trading character. Depending on the facts which are yet to be ascertained, that may well be so. In case it matters, however, we should say that, in our view, there is nothing of itself about informing and engaging the community concerning the supposed benefits of an anticipated infrastructure project which renders the exercise an essentially governmental activity. It depends on all the facts. Common experience is enough to know that both governments and private organisations publish large amounts of propaganda in order to attune the hearts and minds of the public to the supposed benefits of projects which they propose to construct. It depends on the nature of the project whether the propaganda is entirely governmental or imbued with a commercial flavour.

For example, if a government were proposing to construct a non-commercial public hospital as part of a State taxpayer funded health care project, it could hardly be thought that government representations to the public as to the supposed benefits of that hospital would have any commercial flavour about them. On the other hand, if a government were proposing to set up, say, a telephone or internet service provider to sell telephonic and internet services to the public, either alone or in partnership with a commercial organization, it is difficult to see why government representations to the public about the supposed benefits of the service would not be of a commercial or at least partly commercial nature.

Finally, on this aspect of the matter, the judge also concluded that substantial infrastructure planning and development is not an activity which a private citizen or trader might undertake.[59] But, in our view, that depends on the nature and purpose of the planning and development including among other considerations, whether what is proposed is a commercial operation, and the stage and level at which the planning and development are undertaken. For instance, to develop high level governmental plans for the construction over the next decade or so of a substantial augmentation to defence facilities or, possibly, a public railway network, would likely be regarded as purely a governmental function, whereas to plan for the operation of an electricity undertaking of the kind in issue in NT Power would properly be regarded as an essentially commercial activity.
[59]Second Reasons [61].

Here, the appellant says that the element of commerce or trade such as a private citizen or trader might undertake is that the motorway in question is to be constructed and operated as a tollway in private partnership with a private developer. He claims (albeit for the moment without the aid of the discovery and production of the documents which the respondents have thus far resisted) that the State and LMA have separately or together so far proceeded down the path of planning, designing and seeking to finance the motorway and by calling for tenderers to engage with the State in a public private partnership for the construction and operation of the motorway, that the State is properly to be seen as having begun to carry on a business of designing, constructing, building and operating the motorway as a tollway for reward.

It will be a question for the judge, on the basis of all of the facts and circumstances of the case once they have been determined, whether that is sufficient to take the matter out of the realm of purely governmental or regulatory activity into the ambit of carrying on business.

Grounds 22–29 – Trade and Commerce

Grounds 22 to 29 of appeal address the subject ‘trade or commerce’.

As indicated above, the second question raised for preliminary determination was whether, on the assumption that each respondent made each of the representations, ‘that conduct [was] in trade or commerce for the purposes of s 18 of the Australian Consumer Law applying as a law of Victoria pursuant to s 8 of the Fair Trading Act’? Given his conclusion that the provisions of s 16 of the ACL Victoria were not enlivened and, thus, the ACL did not apply because neither the State nor LMA were carrying on business at any relevant time, it was strictly unnecessary for the judge to address the second question that asked whether the making of the representations was ‘in trade or commerce’. The judge, however, did address that question as, he said, it ‘may have significance if a different view were taken with respect to the first question’.[60] In the event, on the basis of the authorities to which he had been referred, the judge held that the impugned conduct was not conduct ‘in trade or commerce’.[61]
[60]Second Reasons [86].
[61]Second Reasons [84]–[117].

The judge considered that three principles emerged from the authorities. First, even though the terms ‘trade’ and ‘commerce’ are not terms of art ‘but are expressions of fact and terms of common knowledge of the widest import’, in s 18 of the ACL, ‘the terms “trade or commerce” are prefaced by the preposition “in,” the effect of which is to limit the operation of the provision’.[62] Secondly, ‘as with the “carrying on of a business” question, there may, in any particular case, be a temporal issue in relation to the “trade or commerce” question. Thus, to be “in trade or commerce”, the impugned conduct must coincide with the conduct of trade or commerce’.[63] Thirdly, ‘while recognising that the categories are not necessarily mutually exclusive, “political” conduct may often lack the necessary commercial character to constitute trade or commerce’.[64]
[62]Second Reasons [88] (citations omitted).
[63]Second Reasons [99].
[64]Second Reasons [100] (citation omitted).

The judge rejected a contention that the representations were promotional activities in the manner contended for by the appellant. He found that the fact that they were directed to the commercial viability of the Project which relies on a very significant investment of public funds did not necessarily imbue them with a trading or commercial character. Rather, he found that they were in the manner of ‘announcements … 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’.[65] He also found that there was an insufficient temporal connexion with any ongoing business and the necessary commercial character. He said: ‘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’.[66] So far as LMA was concerned, the judge rejected a contention that its objects were ‘inherently commercial’; rather, he held that its activities were more in the nature of ‘the function of government, rather than trade or commerce’.[67] This conclusion, he held, was not affected by the fact that a tollway was to be used in part to fund the delivery of the Project. He said: ‘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’.[68] Finally, the judge held that the publication of the relevant documents that contained the representations ‘[could] not properly [be] characterised as its engaging in promotional activities which bear a trading or commercial character’.[69] Either those documents were not themselves promotional or they had been published in conformity with statutes that required their publication.[70]
[65]Second Reasons [107].
[66]Second Reasons [109].
[67]Second Reasons [110]–[111] (citation omitted).
[68]Second Reasons [112].
[69]Second Reasons [115].
[70]Second Reasons [115]–[116].

In large part, grounds 22 to 29 are directed to the impact of the procedure adopted by the judge on the appellant’s ability to propound his case that the impugned representations constituted conduct ‘in trade or commerce’.[71] In this respect, for example, the appellant complains that there were insufficient pleaded facts upon which the judge could have based his conclusions and the appellant had been denied an opportunity to get the documents necessary to propound his case. Because we have decided that there is substance in these complaints, and that the matter must be remitted, it is unnecessary further to address the grounds of appeal that deal with matters of process affecting the findings on the second question. It is also not appropriate to deal with the other grounds of appeal that relate to ‘trade or commerce’. These can all be addressed when the matter is remitted. On that occasion, the appellant can also address the questions which he says that the judge failed to consider in his reasons.[72]
[71]See eg Grounds of Appeal 25, 27 and 28 (c)–(f).
[72]Ground of Appeal 29.

Under ground 26 it is contended that the judge erred in holding ‘that the Authority’s activities are the functions of government, rather than trade or commerce, when the two areas of activity are not mutually exclusive’.[73] It is doubtful that the judge proceeded on any such basis. In fact, he expressly disavowed any proposition that because conduct can be described as ‘political’ it necessarily lacks a commercial character to constitute trade or commerce.[74] In any event, the issue whether particular conduct had ‘the necessary commercial character to constitute trade or commerce’, notwithstanding that it was ‘political’ or ‘governmental’ or mandated by statute will all need to be addressed when the matter is remitted.
[73]Ground of Appeal 26.
[74]Second Reasons [100].

There is, however, one matter that it is appropriate to decide on this aspect of the appeal. It relates to the first of the three principles that the judge said emerged from the authorities on the meaning of the phrase ‘in trade or commerce’ in s 18 of the ACL. The appellant contended that those authorities need to be reconsidered.

As has been noticed, the judge said that ‘[i]n s 18 of the ACL, the terms “trade or commerce” are prefaced by the preposition “in,” the effect of which is to limit the operation of the provision.’[75] In reaching that conclusion, he relied upon the majority judgment in Concrete Constructions (NSW) Pty Ltd v Nelson.[76] The judge held that:

[i]t is clear from Concrete Constructions that the challenged conduct must take place in a situation that fairly answers the description ‘in trade or commerce’. It is not sufficient if the conduct occurs in the course of ‘the myriad of activities which are not, of their nature, of a trading or commercial character but which are undertaken in the course of, or as incidental to, the carrying on of an overall trading or commercial business.’[77]

[75]Second Reasons [88].

[76](1990) 169 CLR 594, 602 (Mason CJ, Deane, Dawson and Gaudron JJ) (‘Concrete Constructions’).

[77]Second Reasons [89]; The quotation is taken from Concrete Constructions: Ibid 602–603 (Mason CJ, Deane, Dawson and Gaudron JJ).

In Concrete Constructions, Mason CJ, Deane, Dawson and Gaudron JJ held that the phrase ‘in trade or commerce’ has a ‘restrictive operation’. They restricted the application of s 52 to ‘the conduct of a corporation towards persons, be they consumers or not, with whom it (or those whose interests it represents or is seeking to promote) has or may have dealings in the course of those activities or transactions which, of their nature, bear a trading or commercial character’.[78]
[78]Ibid 604.

The judge appears to have proceeded, albeit implicitly, on the presumption that, in re-enacting the words once found in s 52 of the Trade Practices Act 1974 (Cth), Parliament intended to adopt the meanings judicially attributed to them.[79] During the hearing of the appeal, counsel for the appellant contended that the existing authorities on the meaning of the expression ‘in trade or commerce’, did not apply given the circumstances of the re-enactment of s 52 of the Trade Practices Act 1974 (Cth) by s 18 of the ACL.[80] He said that the enactment of the ACL had introduced a new ‘norm of conduct’. He contended that the existence of the restriction identified by the majority in Concrete Constructions had now to be ‘reconsidered entirely in the context of the current statutory regime and it would be an error of law to apply it without that reconsideration’. He said that, in identifying the restriction, the majority in Concrete Constructions had attached great significance to the words ‘Consumer Protection’ which formed the heading to Part V of the Trade Practices Act 1974 (Cth) (which included s 52). He said that the restriction had to be reconsidered particularly because: (1) the removal of the heading, (2) the inclusion of a definition in the ACL of the expression ‘trade or commerce’ which was not found in the previous legislation and (3) the text of the Explanatory Memorandum for the ACL.[81] In Concrete Constructions, the majority had described the alternative constructions of s 52. In that respect, they said ‘[a]lternatively, the reference to conduct “in trade or commerce” in s. 52 can be construed as referring only to conduct which is itself an aspect or element of activities or transactions which, of their nature, bear a trading or commercial character’.[82] Counsel for the appellant pointed out that that was the alternative adopted by the majority. He paid particular reference to the word ‘only’ found in the clause ‘can be construed as referring only to conduct which is itself an aspect or element of activities or transactions’. The Explanatory Memorandum contained the following:

3.13The High Court has found, for the purposes of section 52 of the TP Act, that ‘trade or commerce’ includes conduct which is itself an aspect or element of activities or transactions which, of their nature, bear a trading or commercial nature. [83]

[79]See DC Pearce and Robert Geddes, Statutory Interpretation in Australia (LexisNexis, 6^th ed, 2006) [3.43]. See eg Re Alcan Australia Limited; Ex Parte Federation of Industrial Manufacturing & Engineering Employees (1994) 181 CLR 96, 106: ‘There is abundant authority for the proposition that where the Parliament repeats words which have been judicially construed, it is taken to have intended the words to bear the meaning already "judicially attributed to [them]" Barras v Aberdeen Steam Trawling and Fishing Co. See also D'Emden v Pedder; Pillar v Arthur; Platz v Osborne, although the validity of that proposition has been questioned; Salvation Army (Victoria) Property Trust v Shire of Fern Tree Gully; Reg. v Reynhoudt; Flaherty v Girgis. But the presumption is considerably strengthened in the present case by the legislative history of the Act.’(citations omitted). The strength of the presumption is affected by the status of the court that provided the relevant construction before re-enactment; see Williams v Oataway (2005) 11 VR 529, 540 (Batt JA with whom Buchanan and Vincent JJA agreed).

[80]This particular contention was not raised in the appellant’s notice of appeal. It did not form part of his written submissions either at the trial of the separate questions or on the appeal. Presumably, for those reasons, it was not addressed in the respondents’ written submissions on either occasion. Because it has never been committed to writing, it lacks both precision and stability. During the oral argument, there were shifts in its formulation. However, the appellant devoted considerable attention to the contention in his oral submissions, and the respondents raised no objection to its being considered on the appeal.

[81]In oral argument, counsel said: ‘But, more importantly, in the Year 2010 it would be quite accurate to describe it as a statutory norm, the question then being, was it intended to have this restrictive meaning and why change the heading? The heading is now general protection and consumers are dealt with elsewhere. So all the pillars for the reasoning in Concrete Constructions, the heading, no new norm of conduct by side wind give a narrow restricted meaning and no definition of trade and commerce of the kind we now have and, finally, a statement of broad statutory objectives in the purpose provision, all of those had no role [viz in the former provision and Concrete Constructions] and they're now part of the present statutory hierarchy.’

[82](1990) 169 CLR 594, 603.

[83]Explanatory Memorandum, Trade Practices Amendment (Australian Consumer Law) Bill (No. 2) 2010 (Cth).

At this point, the Explanatory Memorandum cited Concrete Constructions. Counsel drew a contrast between the use of the word ‘only’ in the majority judgment and the word ‘includes’ in par 3.13. He suggested that the statutory norm had moved from being ‘exhaustive’ (under the restrictive interpretation given by the majority in Concrete Constructions) to merely inclusive.

In the event, the appellant submitted that the new statutory regime justifies a broad reading of the expression ‘in trade and commerce’ such that, if a person is carrying on business ‘and the conduct is in the course of that business then it is a business activity and would fall within the words naturally in trade and commerce’. He said ‘when you're engaging in a business activity you are engaging in trade and commerce for the purposes of s 52 [sic].’ And, later: there was now ‘an intentional policy decision by every government in the country to have this as a statutory norm … [f]or any business activity’.

In his reply, he put it slightly differently. He said that the ‘expanded operation of s 18 of the ACL ‘takes it at least to any business activity which is part of the definition. It's looking at the activity and asking is this company carrying on business in the context of our case, and if one of the activities which constituted carrying on business involves misleading and deceptive conduct, it will be in trade and commerce’.[84]
[84]The appellant also contended that the judge should have held that the impugned conduct also fell within the restrictive interpretation contained in Concrete Constructions. But, as counsel put it: ‘We see ourselves as incapable of losing under the new test but capable of losing under the present test’. In present circumstances, it is inappropriate to express an opinion on whether the conduct fell under the ‘present test’.

Analysis

In our opinion, s 18 of the ACL remains subject to the limitations that were authoritatively identified by the majority in Concrete Constructions. An analysis of each of the matters referred to by the appellant does not lead to a conclusion different from that asserted in the Explanatory Memorandum which was to the effect that s 18 of the ACL replaced s 52 of the Trade Practices Act 1974 (Cth) ‘without substantive change’[85] and that ‘[t]he only change made in including the prohibition in the ACL is to apply the prohibition to ‘a person’ rather than ‘a corporation’.[86]
[85]Explanatory Memorandum, Trade Practices Amendment (Australian Consumer Law) Bill (No. 2) 2010 (Cth), 3.2.
[86]Ibid 3.3.

At the time that Concrete Constructions was decided, s 52 was contained in Division 1 of Part V of the Trade Practices Act 1974 (Cth). That part was headed ‘Consumer Protection’. Division 1 was headed ‘Unfair Practices’. Section 52 read:

(1)A corporation shall not, in trade or commerce, engage
in conduct that is misleading or deceptive or is likely to
mislead or deceive.
(2)Nothing in the succeeding provisions of this Division shall be taken as limiting by implication the generality of sub-section (1).

In Concrete Constructions, the plaintiff was an employee of a building company, which was the defendant. He suffered injuries during the course of his employment when he fell to the bottom of an air-conditioning shaft while attempting to remove a grate positioned at the entry point of the shaft. He alleged that his injuries were caused by the conduct of the defendant’s foreman who wrongly informed him that the grates at the entry points of the air-conditioning shafts were fixed by three bolts on each side and that it was safe to remove them in the manner explained by the foreman. The plaintiff said that the instruction was false as ‘one of the grates gave way by reason of the fact that it was not affixed by bolts or otherwise’.[87] He brought his claim under s 52 seeking damages for misleading and deceptive conduct. The Federal Court made an order by consent that the following question be decided before trial: ‘Do the facts pleaded and particularized in the Statement of Claim give rise to a cause of action under the Trade Practices Act, 1974?’[88] The High Court unanimously allowed an appeal from a judge in the Federal Court who had answered that question in the affirmative.
[87](1990) 169 CLR 594, 599.
[88]Ibid 600.

Mason CJ, Deane, Dawson and Gaudron JJ said:

Alternatively, the reference to conduct “in trade or commerce” in s 52 can be construed as referring only to conduct which is itself an aspect or element of activities or transactions which, of their nature, bear a trading or commercial character. So construed, to borrow and adapt words used by Dixon J in a different context in Bank of NSW v The Commonwealth, the words “in trade or commerce” refer to “the central conception” of trade or commerce and not to the “immense field of activities” in which corporations may engage in the course of, or for the purposes of, carrying on some overall trading or commercial business.[89]
…
Indeed, in the context of Pt V of the Act with its heading “Consumer Protection”, it is plain that s 52 was not intended to extend to all conduct, regardless of its nature, in which a corporation might engage in the course of, or for the purposes of, its overall trading or commercial business. Put differently, the section was not intended to impose, by a side-wind, an overlay of Commonwealth law upon every field of legislative control into which a corporation might stray for the purposes of, or in connection with, carrying on its trading or commercial activities. What the section is concerned with is the conduct of a corporation towards persons, be they consumers or not, with whom it (or those whose interests it represents or is seeking to promote) has or may have dealings in the course of those activities or transactions which, of their nature, bear a trading or commercial character.[90]

[89]Ibid 603.

[90]Ibid 603–604.

The other judges agreed that the general words of s 52 were to be read subject to a limitation, but that that limitation was not found in the ‘central conception’ of trade or commerce. Brennan and McHugh JJ ‘found the limitation in a requirement that the conduct proscribed must be conduct which misleads or deceives, or is likely to mislead or deceive, a person in his or her capacity as a consumer. Their Honours’ view was that it sufficed that the impugned conduct took place in the course of a trading or commercial activity or transaction as, they conceded, it did in the case before them, provided always it misled or deceived a person in that capacity or was likely to do so’.[91] Toohey J similarly agreed that s 52 was directed at conduct that misled persons in their capacity as consumers of goods and services. He also thought that the section only applied to conduct that formed part of a corporation’s trade or commerce and not to conduct that was merely ‘in relation to’ its trade or commerce.[92]
[91]See Plimer v Roberts (1997) 80 FCR 303, 324–325 (Lindgren J).
[92]See also (1990) 169 CLR 594, 614 (Toohey J): ‘The question is not whether the conduct engaged in was in connexion with trade or commerce or in relation to trade or commerce. It must have been in trade or commerce.’ (Original emphasis.)

As the judge observed, Concrete Constructions has been applied in several decisions to deny relief notwithstanding allegations of misleading and deceptive conduct. For example, in Plimer v Roberts[93] the Full Federal Court held that a lecture containing false representations was not given in trade or commerce notwithstanding that it was sponsored and promoted by a foundation that charged admission and sold merchandise.[94]
[93](1997) 80 FCR 303.
[94]The judge also referred to Pisano v Dandris [2014] NSWSC 1070, [275] (Hammerschlag J); Obeid v Australian Competition and Consumer Commission (ACCC) [2014] FCA 839 at [95] (Farrell J); No Taswind Farm Group Inc v Hydro-Electric Corporation (No 2) [2014] FCA 348, [17] (Kerr J); Toben v Mathieson [2013] NSWSC 1530, [19] (McCullum J); Markan v Bar Association of Queensland [2013] QSC 146 at [56]–[58] (Atkinson J); Australian Competition and Consumer Commission v Neighbourhood Energy Pty Ltd [2012] FCA 1357, [5] (Marshall J); Astra Resources Plc v Full Exposure Pty Ltd [2012] FCA 1061, [28] (Besanko J).

Australian Consumer law

We have already noted that the ACL is applied in Victoria by the Australian Consumer Law and Fair Trading Act 2012. To address the present contention, it is necessary to consider not only those statutes but also the Competition and Consumer Act 2010 (Cth) in which the ACL is found as Schedule 2.

The Australian Consumer Law and Fair Trading Act 2012 provides:

1 Purposes
The main purposes of this Act are—
(a)to promote and encourage fair trading practices and a competitive and fair market;

(b)       to protect consumers;
(c)       to regulate trade practices;
(d)      to provide for codes of practice;
(e)to provide for the powers and functions of the Director of Consumer Affairs Victoria including powers to conciliate disputes under this Act and powers to carry out investigations into alleged breaches of this Act;
(f)to promote uniformity with the consumer laws of other jurisdictions through the interpretation and application of the Australian Consumer Law in Victoria consistently with those laws;
(g)to regulate certain businesses;
…

7 The Australian Consumer Law text
The Australian Consumer Law text consists of—
(a)Schedule 2 to the Competition and Consumer Act 2010 of the Commonwealth; and

(b)       the regulations under section 139G of that Act.
8 Application of Australian Consumer Law
(1)       The Australian Consumer Law text, as in force from time to time—
(a)       applies as a law of this jurisdiction; and
(b)as so applying may be referred to as the Australian Consumer Law (Victoria); and
(c)as so applying is a part of this Act.

(2)This section has effect subject to sections 9, 10 and 11.[95]
[95]Section 9 provides for future modifications of the ACL text. Section 10 relates to the meaning of some generic terms. Section 11 provides that the Acts Interpretation Act 1901 (Cth) applies to the ACL and that the Interpretation of Legislation Act 1984 does not apply.

…
12 Application of Australian Consumer Law
(1)The Australian Consumer Law (Victoria) applies to and in relation to—
(a) persons carrying on business within this jurisdiction; or
(b)bodies corporate incorporated or registered under the law of this jurisdiction; or
(c)persons ordinarily resident in this jurisdiction; or
(d)persons otherwise connected with this jurisdiction.

…

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.
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.
…

Part 1 of the Competition and Consumer Act 2010 (Cth) is entitled ‘Preliminary’. Section 2 is in Part 1. It provides:

2 Object of this Act
The object of this Act is to enhance the welfare of Australians through the promotion of competition and fair trading and provision for consumer protection.

As already indicated, the ACL is Schedule 2 to the Competition and Consumer Act 2010 (Cth). Chapter 1 is entitled ‘Introduction’. Section 2 contains definitions including:

…
business includes a business not carried on for profit.
…
trade or commerce means:
(a) trade or commerce within Australia; or
(b) trade or commerce between Australia and places outside Australia;
and includes any business or professional activity (whether or not carried on for profit).

Chapter 2 is entitled ‘General protections’. Part 2-1 is entitled ‘Misleading or deceptive conduct’. It includes s 18. Section 18 of the ACL provides:

18 Misleading or deceptive conduct
(1)A person must not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive.

…

Chapter 3 of the Explanatory Memorandum for the Trade Practices Amendment (Australian Consumer Law) Bill (No.2) 2010 (Cth) is entitled ‘Misleading or deceptive conduct’. It contains the following:

Outline of chapter
3.1The ACL contains a general prohibition against misleading and deceptive conduct in trade or commerce.
Context of amendments
3.2The ACL includes a provision to replace the prohibition on misleading or deceptive conduct currently set out in section 52 of the TP Act, without substantive change. A similar prohibition is in the FT Acts of the States and Territories in substantially the same form as section 52 of the TP Act.
3.3The only change made in including the prohibition in the ACL is to apply the prohibition to ‘a person’ rather than ‘a corporation’. This reflects the broader application of the ACL.
3.4The jurisprudence associated with the understanding and interpretation of section 52 of the TP Act and the equivalent provisions in State and Territory fair trading laws is still relevant.
Summary of new law
3.5Subsection 18(1) of the ACL provides that a person must not, in trade or commerce, engage in misleading or deceptive conduct or conduct that is likely to mislead or deceive. This is a general prohibition, which creates a norm of business conduct in the market.
…
3.9The provisions of the ACL apply to all persons — whether they are individual persons or bodies corporate — as it will be a law both of the Commonwealth and of each State and Territory. Section 131 of the CC Act applies the ACL to the conduct of corporations.
3.10The prohibition on misleading or deceptive conduct creates a broad norm of conduct in the market. A finding that the prohibition is proven according to the relevant standard of proof does not result in exposure to a criminal sanction or civil penalty under the ACL. Rather, such a finding exposes the person who has breached the provision to the wide range of remedies available under Chapter 5, Part 5-2 of the ACL, including redress for non-party consumers.
3.11Section 18 of the ACL replaces the repealed section 52 of the TP Act. The substance of the drafting of the prohibition has not been changed, other than changing the reference to ‘a corporation’ to ‘a person’. Accordingly, the well-developed jurisprudence relating to section 52 of the TP Act is relevant to the interpretation or understanding of the meaning and application of section 18 of the ACL.
3.12Section 18 of the ACL applies to conduct ‘in trade or commerce’. ‘Trade or commerce’ is defined as meaning ‘trade or commerce within Australia, or between Australia and places outside Australia, and includes any business or professional activity (whether or not carried on for profit)’. The ACL applies to conduct engaged in outside of Australia, provided that at least some aspect of the trading relationship between two or more parties has taken place in Australia.
3.13The High Court has found, for the purposes of section 52 of the TP Act, that ‘trade or commerce’ includes conduct which is itself an aspect or element of activities or transactions which, of their nature, bear a trading or commercial nature. [The EM provides the following footnote to this paragraph ‘Concrete Constructions (NSW) Pty Ltd v Nelson [1990] HCA 17’].
…

The appellant relied on all that material to make good his contention that the prohibition in s 18 of the ACL was not confined to conduct towards persons, ‘be they consumers or not, with whom [a respondent] (or those whose interests it represents or is seeking to promote) has or may have dealings in the course of those activities or transactions which, of their nature, bear a trading or commercial character’ but extended, in the case of a person carrying on business to all conduct in the course of business activity. However, the considerations advanced by the appellant are too slight for them to have the consequences contended for particularly when weighed with the statements in the Explanatory Memorandum that the amendments were designed simply to extend the prohibition from corporations to persons and otherwise to work no further substantive changes.

First, there is the presumption that when Parliament enacts the very same form of words as have been the subject of authoritative interpretation, it is presumed that Parliament intends to adopt that interpretation.

Secondly, although it is true that the location of certain prohibitions and their headings has changed, it remains the case that the relevant objective of the ACL is to protect consumers. See s 2 of the Competition and Consumer Act 2010 (Cth): ‘[t]he object of this Act is to enhance the welfare of Australians through the promotion of competition and fair trading and provision for consumer protection’. See also s 1 of the Australian Consumer Law and Fair Trading Act 2012 (which is the Application Act): ‘[t]he main purposes of this Act are – (a) to promote and encourage fair trading practices and a competitive and fair market; (b) to protect consumers; (c) to regulate trade practices …’.

Thirdly, the Trade Practices Act 1974 included a definition of ‘trade or commerce’. As much as the new definition in the ACL does is to include in the definition of ‘trade or commerce’ the additional words ‘any business or professional activity’. It is not reasonable to conclude that the inclusion of those words work to remove the restriction imposed upon the use of the term ‘in trade or commerce’ contained in Concrete Constructions. It will be recalled that in that case, the majority contrasted the broad generality of the terms ‘trade’ and ‘commerce’ with the temporal element introduced by the word ‘in’ in the phrase ‘in trade or commerce’. The definition in the ACL is confined to the words ‘trade or commerce’. But, s 18 uses the phrase ‘in trade or commerce’. Meaning has to be given to all the words; the preposition requires there to be a temporal element.

Grounds 30–33 – Relief

The third question tried by the judge was in the following terms:

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 injunctions sought in paragraphs B(b) and B(c) in the Prayer for Relief are injunctions restraining the respondents from:

(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 the 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.
(c)proceeding to further implement or carry into effect the Project based upon a business case containing one or more of the Representations.

The appellant submitted that once a contravention of s 18 of the ACL was established, ‘the court has the widest possible injunctive powers, devoid of traditional constraints’. In support of this submission, the appellant cited the judgment of the Full Court of Federal Court in ICI Australia Operations Pty Limited v Trade Practices Commission.[96]
[96](1992) 38 FCR 248 (‘ICI’).

ICI considered the proper construction and application of s 80 of the Trade Practices Act 1974 (Cth). Section 80 of the Trade Practices Act is the predecessor of s 232 of the ACL. In ICI, Lockhart J said:

In my opinion subss (4) and (5) [of s 80] are designed to ensure that once the condition precedent to the exercise of injunctive relief has been satisfied (ie contraventions or proposed contraventions of Pt IV or V of the Act), the court should be given the widest possible injunctive powers, devoid of traditional constraints, though the power must be exercised judicially and sensibly.[97]

[97]Ibid 256.

The second member of the Court in ICI, Gummow J, said:

Section 80(1) confers upon the court the power to grant an injunction where it is satisfied that a person has engaged or is proposing to engage in conduct that constitutes or would constitute conduct of the description in pars (a)-(f). 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. [98]

[98]Ibid 267. See further Rural Press Limited & Ors v Australian Competition and Consumer Commission (2003) 216 CLR 53, 91 [91].

The third member of the court in ICI, French J,[99] agreed generally with the reasons of Lockhart J.
[99]As his Honour then was.

In Australian Competition and Consumer Commission v Z-Tek Computer Pty Ltd,[100] Merkel J said of injunctive relief that might be granted under s 80(1) or 80(1AA) of the Trade Practices Act that ‘there must be a nexus between the conduct alleged or found to constitute the relevant contraventions and the injunctions granted’. His Honour went on to say that an injunction would not be ‘appropriate’ if there was not a sufficient nexus between the conduct, the subject of the injunction, and the conduct found to constitute a contravention of a provision of the TradePracticesAct. Additionally, he said that if the court grants relief when there is no nexus then it would not be exercising judicial power within the confines of Chapter III of the Constitution.[101]
[100](1997) 78 FCR 197 (’Z-Tek’).
[101]Ibid 202–203.

Subsequently, in Australian Competition and Consumer Commission v Real Estate Institute of Western Australia Inc,[102] French J said:

I respectfully accept, as I did previously, the observations of Merkel J in Australian Competition and Consumer Commission v Z-Tek Computer Pty Ltd … that there must be a nexus between the conduct alleged or found to constitute the relevant contraventions and the injunctions granted. … Whether there is a sufficient nexus between the orders sought and the contravention alleged involves an evaluative judgment.[103]

[102](1999) 95 FCR 114 (‘ACCC v Real Estate Institute’).

[103]Ibid 131. See further, Australian Securities and Investments Commission v McDougall (2006) 229 ALR 158, 170–175 [59]–[72].

While the appellant accepted that the authorities concerning s 80 of the Trade Practices Act have application in respect of cases concerning s 232 of the ACL, the appellant contended that s 232 of the ACL is, so far as the appellant’s application for injunctive relief of the type claimed in paragraphs B(a) and B(c) of the Prayer for Relief is concerned, in more favourable terms to the appellant than s 80 of the Trade Practices Act. Specifically, the appellant relied upon the insertion of sub-ss (5) and (6) of s 232 of the ACL, which sub-sections were not found in s 80 of the Trade Practices Act. Sub-sections (5) and (6) of s 232 of the ACL provide:

(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.
(6)Without limiting subsection (1), the court may grant an injunction under that subsection requiring a person to do any of the following:
(a)       refund money;
(b)       transfer property;
(c)       honour a promise;
(d)      destroy or dispose of goods.

It may be accepted that s 232 makes specific reference to relief that might be ordered, which relief was not identified in specific terms in s 80 of the Trade Practices Act. Nevertheless, it seems to us that the authorities to which we have referred concerning a necessary nexus, the performance of an evaluative judgment and the judicial and sensible exercise of the injunctive power apply as much to s 232 of the ACL as they did to s 80 of the Trade Practices Act.

With all respect to the judge in the present case, we find it very difficult to see how the necessary evaluative process could be undertaken in this case without reference to all of the facts that might be found following a trial (on evidence rather than ‘on the pleadings’) of the issues in dispute between the parties. While the respondents pointed to ACCC v Real Estate Institute as a case where the court (French J) did perform the necessary evaluative task on the pleadings, it is to be remembered that his Honour did so because there was to be no trial in that proceeding — the parties having resolved their differences and submitted consent orders containing injunctions, the terms of which had been agreed by them.

Additionally, as French J said in ICI:

There is room within the statutory framework and the policy that underlies it for an injunction which is intended not to restrain an apprehended repetition of contravening conduct but to deter an offender from repeating the offence. That deterrence is effected by attaching to the repetition of the contravention the range of sanctions available for contempt of court.[104]

[104]ICI (1992) 38 FCR 248, 268.

The relief that the appellant (plaintiff) might obtain following a trial may well depend upon a number of factors that cannot be fully if at all evaluated at this stage. Repetition of conduct is one such factor. The seriousness of any particular breach or breaches that might be established is another. Although the judge regarded it as highly unlikely that the plaintiff could ever persuade a court to make orders of the kind sought in paragraphs B(b) and B(c) of the Prayer for Relief, (and for the reasons we gave when refusing interim relief, we are not inclined to disagree) in the absence of all of the evidence and remembering that the appellant alleges continuing and ongoing contraventions, the judge should not have excluded the possibility of a particular remedy that might be shown, upon a full consideration of all of the facts, to have the necessary nexus with an established contravention of s 18 of the ACL. It follows that it was inappropriate to answer the third of the separate questions.

Remittal

Assuming that this proceeding is remitted to the Trial Division, counsel for the appellant submitted that it would be undesirable to return the proceeding to the original judge because that judge has made final determinations (albeit on incomplete material) in relation to critical issues in the proceeding. While it is not suggested that the judge would be incapable of putting these matters out of his mind and determining the issues afresh upon the whole of the evidence that might be adduced by the parties, the question of whether a fair minded lay observer might reasonably apprehend that the judge might not bring an impartial mind to the resolution of the questions the judge has already purported to decide would undoubtedly arise.[105]
[105]See Ebner v Official Trustee in Bankruptcy (2000) 205 CLR 337, 344 [6] (Gleeson CJ, McHugh, Gummow and Hayne JJ).

The respondents resist the matter being remitted to a different judge of the Trial Division. They contend that this would be wasteful because the judge who heard the trial of the separate questions already has a detailed knowledge and understanding of the issues. In support of this contention, the respondents point generally to the provisions of the Civil Procedure Act 2010 (Vic) which mandate the conduct of civil proceedings being undertaken so as to facilitate the just, efficient, timely and cost effective resolution of the issues in dispute between the parties.

In Northern NSW FM Pty Ltd v Australian Broadcasting Tribunal,[106] Davies and Foster JJ said in respect of the rehearing of a matter before the Australian Broadcasting Tribunal:

If a decision has been set aside for error and remitted for rehearing, it will generally seem fairer to the parties that the matter be heard and decided again by a differently constituted tribunal. This is because the member constituting the Tribunal in the original inquiry or hearing will already have expressed a view upon facts which will have to be determined in the rehearing. The aggrieved party may think that a rehearing before the Tribunal as originally constituted could be worthless, for the member’s views have been stated.[107]

[106](1990) 26 FCR 39.

[107]Ibid 42. See further, Body Corporate Strata Plan No 4166 v Stirling Properties Limited (No 2) [1984] VR 903, 912 (Ormiston J); Kocak v Wingfoot Australia Partners Pty Ltd (2012) 35 VR 324, 353 [18], reversed on appeal [2013] HCA 43, but not on this point. As to the position in respect of appeals from judges of the County Court see s 74(3) of the County Court Act 1958.

It may be accepted that the power to direct a rehearing by a different judge should be used sparingly.[108] Nevertheless, such an order should be made where the interests of justice require it. Further, where a judgment gives rise to a reasonable apprehension of bias, this will usually be a basis for making such an order.
[108]Minister for Immigration and Multicultural Affairs v Wang (2003) 215 CLR 518; Seltsam Pty Ltd v Ghaleb [2005] NSWCA 208 [12]–[17] (Mason P), [141]–[142] (Ipp JA) and [237]–[239] (Basten JA). See further, Hudspeth v Scholastic Cleaning and Consultancy Services Pty Ltd (No 2) [2014] VSCA 78 [71]–[74] (Whelan JA, with whom Warren CJ and Tate JA agreed on this issue).

In the judgment answering the separate questions, the judge, from time to time, expressed himself as not being satisfied that, on the material before him, the appellant had made good a particular claim.[109] No question of apprehended bias could arise in respect of those observations. However, at other parts of the judgment, the judge uses more emphatic language in rejecting the appellant’s contentions. For example, ‘it is scarcely credible to suggest …’;[110] ‘Consequently, it is entirely inapt to characterise the conduct of the State … as conduct in the course of carrying on a business …’;[111] and ‘In my opinion … it is impossible to say that, when the representations were made, the State was carrying on … business’.[112] Without being in any way critical of the judge (who was entitled to express his conclusions firmly), it seems to us that a fair minded lay observer might reasonably apprehend that, in respect of the issues dealt with in those parts of the judge’s reasons, the judge might not bring an impartial mind to the resolution of the issues about which such firm conclusions have been expressed.
[109]See for example Second Reasons [64].
[110]Second Reasons [58].
[111]Second Reasons [61].
[112]Second Reasons [62].

In all of the circumstances of the case, and in particular in the light of the firmly expressed conclusions to which we have referred, we are persuaded to direct a remittal of this proceeding for rehearing in the Trial Division before a judge other than the judge who heard and determined the separate questions.

Conclusion

The appeal must be allowed. The proceeding will be remitted to a judge of the Trial Division other than the judge who heard the trial of the separate questions.

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[2014] VSCA 238

29 September 2014