Pisano & Anor v Williams

[2015] HCATrans 327

[2015] HCATrans 327

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Sydney  No S143 of 2015

B e t w e e n -

BRUNO PISANO

First Applicant

SIA PISANO

Second Applicant

and

PATRICK FRANCIS WILLIAMS

Respondent

Application for special leave to appeal

KIEFEL J
BELL J

TRANSCRIPT OF PROCEEDINGS

FROM SYDNEY BY VIDEO LINK TO MELBOURNE

ON FRIDAY, 11 DECEMBER 2015, AT 9.51 AM

Copyright in the High Court of Australia

MR B.W. WALKER, SC:   May it please the Court, I appear with my learned friends, MR D.S. WEINBERGER and MS A.F. KNOX, for the applicant.  (instructed by Gadens Lawyers)

MR C.J. BIRCH, SC:   May it please the Court, I appear with my learned friend, MS Y.S. FROST, for the respondent.  (instructed by Alexanders Lawyers)

KIEFEL J:   Yes, Mr Walker.

MR WALKER:   Your Honours have seen that the proposed issue for this Court is whether there was a wrong turn taken in 1983 in the Full Court of the Federal Court – O’Brien v Smolonogov appears to be the root of a course of decision‑making which has its own unsatisfactory features which nonetheless has carved out an immunity for the sale by its owners of residential properties from the norms of conduct which proscribe misleading and deceptive conduct.

In our submission, there is a framework, which this Court has not had yet an opportunity to consider, which gives rise to a very serious possibility, a very serious possibility that that was a wrong turn.  The first, of course, is that “trade and commerce” are not words which are to be given any casual significance in this statute.  They are words, of course, that also have constitutional import.  The second is that they are necessarily broad, given the variety of social dealings of a business as well as financial kind that falls within it.  Third, there is the proper regard for enacted text which, in our submission, can be seen to have enjoyed insufficient regard in the decision and reasoning back in 1983.

Now, that is the framework in terms of the nature of the expression – a very broad one – and the text which completely leaves out any reference to what might be called a domestic exception.  The significance of that can be highlighted by recalling that the Trade Practices Act as was, now the Australian Consumer Law, for example, in the latter’s section 3, specifically uses the word and concept of “domestic” or “domesticity” in order to define matters of consumer protection, distinguishing what might be called “red in tooth and claw” or “professional business”. So, where the Parliament intends that there be some kind of either immunity or special protection by reference to what might be called connection with a home, then there has been specific provision accordingly.

BELL J:   The other side of that coin, I think, is the matter adverted to by the respondent in paragraph 18 of their submissions, that for some 30 years, courts have approached trade and commerce consistently with the decision of the Court of Appeal here and, throughout that period, there have been regular revisions and amendments to the Trade Practices Act leading, of course, to its complete recasting in the Competition andConsumer Act.  That is something of a hurdle, is it not, for the submissions that you are advancing?

MR WALKER:   Yes.  It is the familiar argument, one which, in itself, has no textual footing – in fact, really announces that this is extra‑textual which says of the words that the way in which parliaments – in this case, of course, with very comprehensive recasting, not focusing on particular provisions, such as we are talking about – that Parliament, by silence, has, as it were, phantom‑enacted judicial interpretations. 

Now, sometimes, with respect, that aspect, that negative aspect of legislative history, can be, indeed, a very powerful argument against a profit reading, which profit reading might, 30 years ago, have had, therefore, more attractiveness than it does now.  I accept that.  It is an obstacle, for all the reasons that our friends have written and Justice Bell has just pointed out.

But, the course of judicial decision which has followed 1983 and which we have sought to summarise in paragraphs 21 and following of our written outline, 138 of the application book and following, the course of judicial decision‑making shows a distinct instability and a lack of an appropriate definition as a result of particular cases with their particular facts arising for decision.

KIEFEL J:   You say in your written submissions that the history of these cases – that the cases are characterised by an absence of reasoning about statutory construction and that ‑ ‑ ‑

MR WALKER:   Yes.

KIEFEL J:   ‑ ‑ ‑ statutory construction is what this is all about.  But as Justice Emmett points out in the Court of Appeal in this matter, what the cases have done is to focus upon the words “trade or commerce” and one would have thought, in orthodox methods of construction, determine that they involve central conceptions of trade or commerce, whereas, I do not think you have actually proffered a construction of the provisions as such.  But you do point, at paragraph 36 of your written submissions, to “exchange dealings”.  So I take it that rather than reading the words “trade or commerce”, you would read the provisions as saying that a person must not in exchange dealings engage in conduct.  Is that so?

MR WALKER:   Not quite, your Honour, but very nearly.  We do not offer that as alternative to the words of “trade or commerce” but as an attempt, by paraphrase, to indicate what might be regarded as the central conception of trade or commerce.  Both words, “trade” and “commerce”, involve what might be called “to and fro”.  The very notion ‑ ‑ ‑

KIEFEL J:   Quite.  They involve exchange dealings but the construction that you would contend for would mean that the words “trade and commerce” really do not have an additional meaning beyond the basic exchange bargain that lies at their base and it would introduce an application of the sections of such generality that almost every exchange dealing with corporations would be affected.

MR WALKER:   Yes.  There is no doubt about it that what we propose, based upon what we offer as a more sound textual basis and giving appropriately broad regard to the scope of “trade and commerce” which, as I say, has not just statutory but also constitutional purposes, in our submission, yes, of course, the commercialising – turning to advantage for gain – of one’s former residence after investing in improvements to make it more attractive to a market – yes, we say, contrary to a previously received, if poorly explained understanding – that ought to be within this statute because it always was. 

In that sense, yes, we are proposing an expansion and we say as a matter of the evident policy of the Act that would be a good thing.  There is nothing in the Act, certainly not a single word to suggest that there is, as it were, a free shot for misleading and deceptive conduct in relation to selling your own house as opposed to, as a developer, selling a house which you have built on land you purchased for the purposes of making a residential structure for sale.

KIEFEL J:   On this approach, though, how would you determine the boundaries of what came within or without the provisions?  When would something not be in trade or commerce if it involved an exchange dealing where representations had been made and the person was intending to make a profit?

MR WALKER:   They would be within – we propose that the definition accord with the ordinary English and read purposively of “trade and commerce”.  In other words, we may all from time to time engage in trade or commerce.  It is not a protected profession.  It is not a profession at all.  In our submission, the norm of conduct is one which can as well be expected of the person who wishes to sell something – it need not be their home, of course - which they have formerly made personal use of as to somebody who does that as, for example, a wholesaler.

KIEFEL J:   Your argument then focuses more on the norm of conduct rather than the context in which it is made. 

MR WALKER:   Yes.  Our argument very much says this is a norm of conduct, the significance of which, in terms of risk allocation, is expressed in terms which does not permit, from within the words by which it is enacted, any distinguishing of a class that has an immunity, presumably from time to time and according to circumstances, to engage in misleading and deceptive conduct.  There is no exception provided anywhere in the Act, let alone in the section. 

Now, as I say, this may be contrasted with the carve‑outs by way, not only of immunity, but also extra protection which you see in relation to some of the consumer provisions by reference overtly to that which is, for example, domestic.  We do not find anything like this when somebody is making money, or seeking to make money out of turning to commercial advantage what is, for most people, the most expensive item of property they will ever own, that is, purchase or sell.

In our submission, the way in which we seek to show that the course of judicial decisions since 1983 is unsatisfactory and does not really present the obstacle to which Justice Bell referred is as follows.  One sees, case by case, as we have sought to trace it in those written submissions to which I have referred, you see case by case, raising, without fully articulating, first the possible role of subjectivity, that is, an intention which, in the ordinary course, would never be communicated or easily proved, in the mind of a vendor.

We see also what might be the completely private and confidential, as it were, portfolio.  Is this one of seven houses?  Is this your only house?  We have as well intentions that may go back some years – we cannot really afford to live in this house, but we can afford to buy it, live in it while we do it up and sell it to make a profit eventually so as to be able to have a house we can afford without a mortgage, not an unknown social stratagem.  In our submission, the notion that that is obviously not trade and commerce need only be raised to be rejected.

BELL J:   We are concerned with conduct in trade and commerce ‑ ‑ ‑

MR WALKER:   Quite.

BELL J:   ‑ ‑ ‑ which might carry with it a somewhat different connotation simply to taking the words “trade and commerce” by themselves.

MR WALKER:   Yes, indeed, your Honour.  We say that the conduct in trade and commerce has to do with those things which enjoy a sufficiently direct or inherent relation with the exchange dealing and ought not involve, particularly by way of immunising a person who has engaged in misleading and deceptive conduct, immunising a person by reasons of what I might call a life plan – private between, say, husband and wife and maybe their bank – formed, perhaps, years before and years before they had any dealings with the market for their property about which, ex hypothesi, they go on to make misleading and deceptive statements.

In our submission, yes, when one concentrates as one must on the norm which is of conduct in trade and commerce then one, in our submission, would readily reject the notion that the kind of subjective particular life plans that I have illustrated could possibly provide a statutory immunity. 

One then goes to a rejected notion of, as it were, a one‑off sale always representing a free shot.  That would be an impossible proposition, particularly for those people who either want to or find themselves forced to engage in repeated changing of residences.  It would be absurd, of course, to give somebody who is intending to set out as a developer what might be called a builder/owner – somebody who owns the property, builds on it by way of improvement or new house in order to engage then in selling for profit.  It would absurd to suppose that that person is free of this norm of conduct the first time he, she or it does so but not in all successive times.

So, “course of business” is not only not to be found in the enacted text but, of course, it provides no principled reason to accept the application of the norm.  So if that were to be true of the builder/owner, why is it not true of the owner/builder in this case?  What is the real difference so far as the protection of a person who again, ex hypothesi, has suffered loss by misleading or deceptive conduct?  What is the nature of the characteristic that Parliament has indicated sufficiently by its words to give a privilege to somebody who is an owner/builder, as in this case, that would not appertain to a builder/owner?

In our submission it is six of one, half a dozen of the other when you can say of both such personages that a property they owned has been improved by them with an end in sight of making a profit – presumably capital in nature in many cases – by inducing someone to buy at as favourable a price as possible. 

Why, one asks, would one read these statutory expressions as providing immunity from responsibility for misleading and deceptive conduct on the one hand but not on the other?  It is the instability and the succession of ill‑articulated and also now rejected explanations of this immunity which, in our submission, justifies this Court examining an important matter, both socially and legally.

Your Honours will have seen, for example, that a conclusory epithet “private” has been used in some of the cases to say therefore it is not trade or commerce.  But a moment’s thought would indicate, not least by reference to colloquial expressions such as “private enterprise”, that that cannot possibly be a discrimen which you can read into these words so as to say that is not trade and commerce. 

It is for those reasons, in our submission, that in answer, particularly to the matters that Justice Kiefel has raised with me, yes, there is a deal of ambition in the argument that we seek special leave to put to the Court on an appeal, that is, we would wish to restore a textual basis, purposively informed, to capture, by imposing a norm of conduct, on transactions which, without any enacted reason being revealed, have by this course of authority been excluded from that norm.

In our submission, it is for all those reasons that this is a case which is well and truly ripe – I suppose some may say overripe – for determination in this Court.  There simply is no decision in this Court to which any of the parties arguing such an issue can look for an appropriate guidance, apart, of course, from general decisions about statutory interpretation.

BELL J:   And a trend of authority for going back 30 years consistent with the application in this case by the Court of Appeal.

MR WALKER:   Of course, your Honour.  But I was referring to decisions in this Court.

BELL J:   Yes.

MR WALKER:   Of course.  I think I have said all I can say about that course of authority and the obstacle, if it be such, that it presents to our present attempts.

BELL J:   I suppose one further obstacle might be the court’s conclusion respecting the evidence adduced to establish the compensable loss?

MR WALKER:   That is highly particular, of course, to this case rather than to the matters of principle.

BELL J:   But it does not give a lot of confidence in the likelihood of a successful outcome were special leave to be granted.

MR WALKER:   I would seek to dissuade your Honours from that as follows.  There is nothing more obvious that when one thinks you have a house that is safe and comfortable to live in to want to make it good at the cost of repairs and refurbishment is you discover it is not.  There is no doubt, for example, that if there had been a civil wrong committed – I do not mean under a contract – but a civil wrong committed by which a house,

formerly pristine, had been damaged – there is no doubt the measure of damage or loss would be the reasonable cost of repairs.

In our submission, one should not too readily reject, for the statutory measure, some quasi‑analogical resort to reasoning of that kind.  It is by no means logically or commercially wrong, that is a priori wrong, to say of the damage that a person has suffered by paying a price for something thought to be in good order but found to be defective, and having been misled and deceived into receiving that discrepant outcome, it is by no means obviously wrong to say the measure of your loss is what is necessary in order to make good that deficiency.

The Court of Appeal has not, with respect, reached a conclusion about that.  Your Honours have been directed by both sides, in our written submissions, to the exiguous passages in the reasons of Justice Emmett, agreed in – specifically on that point – by each of the other two judges.  None of that reasoning amounts to a conclusion and none of that reasoning can be said to have disposed of arguments of the kind that I have just sketched.  In our submission, the statutory measure is most unlikely to be read in a confined fashion, producing such pessimism about the actual result in this case.  May it please the Court.

KIEFEL J:   We will not need to trouble you, Mr Birch.

We consider that there is no reason to doubt the correctness of the decision below.  Special leave is refused with costs.

The Court will adjourn to reconstitute.

AT 10.13 AM THE MATTER WAS CONCLUDED