TPI Enterprises Ltd v Poppy Growers Tasmania Inc
[2014] VSC 518
•24 OCTOBER 2014
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMON LAW DIVISION
MAJOR TORTS LIST
S CI 2013 5577
| TPI ENTERPRISES LTD | Plaintiffs |
| (and others in accordance with the attached Schedule) | |
| v | |
| POPPY GROWERS TASMANIA INC | Defendants |
| (and another in accordance with the attached Schedule) |
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JUDGE: | DIXON J |
WHERE HELD: | MELBOURNE |
DATE OF HEARING: | 29 AUGUST 2014 |
DATE OF JUDGMENT: | 24 OCTOBER 2014 |
CASE MAY BE CITED AS: | TPI ENTERPRISES LTD v POPPY GROWERS TASMANIA INC |
MEDIUM NEUTRAL CITATION: | [2014] VSC 518 |
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DEFAMATION — Summary judgment application— Whether plaintiff’s claim has no real prospect of success —Whether first defendant acting ‘in trade or commerce’— Pleading — Whether publication capable of giving rise to pleaded imputations — Whether imputations pleaded capable of being defamatory — Alternative application for strike out of paragraphs of statement of claim—Whether pleading scandalous, frivolous or vexatious — s 18, Australian Consumer Law — s 63, Civil Procedure Act2010— r 23.01, 23.02, Supreme Court (General Civil Procedure) Rules 2005.
PRACTICE AND PROCEDURE — Summary judgment application— Whether plaintiff’s claim has no real prospect of success —Whether first defendant acting ‘in trade or commerce’— Pleading — Whether publication capable of giving rise to pleaded imputations — Whether imputations pleaded capable of being defamatory — Alternative application for strike out of paragraphs of statement of claim—Whether pleading scandalous, frivolous or vexatious — s 18, Australian Consumer Law — s 63, Civil Procedure Act2010— r 23.01, 23.02, Supreme Court (General Civil Procedure) Rules 2005.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiffs | Dr M. Collins QC with Mr S. Mukerjea | Minter Ellison |
| For the Defendants | Mr A. Strahan | CBP Lawyers |
TABLE OF CONTENTS
Background......................................................................................................................................... 1
Issues on the application.................................................................................................................. 2
Relevant Law................................................................................................................................. 4
The Trade and Commerce Point..................................................................................................... 5
Evidence on the application........................................................................................................ 5
PGT Submissions.......................................................................................................................... 8
Application for summary judgment................................................................................. 8
Strike out application.......................................................................................................... 9
TPI Submissions.......................................................................................................................... 10
Application for summary judgment............................................................................... 10
Strike out application........................................................................................................ 12
Trade and commerce ‑ principles............................................................................................. 13
Concrete Constructions..................................................................................................... 13
Tobacco Institute................................................................................................................ 15
Village Building................................................................................................................ 16
Analysis........................................................................................................................................ 17
The defamation pleadings.............................................................................................................. 20
The imputations as pleaded...................................................................................................... 20
The test.......................................................................................................................................... 21
PGT Submissions........................................................................................................................ 22
TPI Submissions.......................................................................................................................... 23
Attribution of conduct to Mr Ritchie and Mr Dobinson.............................................. 23
The October, radio and online publications................................................................. 24
The April publication....................................................................................................... 25
Analysis........................................................................................................................................ 26
Conclusion and orders.................................................................................................................... 26
HIS HONOUR:
Background
The first plaintiff in these proceedings (‘TPI’) is in the business of processing and distributing ‘concentrate of poppy straw’, which is made from poppy straw that is grown by poppy farmers. The second and third plaintiffs (‘Mr Dobinson’ and ‘Mr Ritchie’), are the Chairman of the Board of Directors of TPI and the CEO and Managing Director of TPI, respectively. The first defendant (‘PGT’) is an incorporated association that represents, advocates for, and pursues the interests of Tasmanian poppy farmers. The second defendant (‘Mr Williams’) is the President of PGT.
The plaintiffs allege that Mr Williams made statements conveying defamatory imputations about TPI, Mr Dobinson, and Mr Ritchie (‘the relevant statements’). The relevant statements are contained in two separate publications. The first publication took place on or about 24 April 2013, when Mr Williams took part in an interview with a commentator employed by the ABC. The ABC broadcast this interview to a wide audience within Tasmania. During the course of the April interview, Mr Williams made the representations set out in Annexure C to the plaintiffs’ statement of claim (‘the April publication’).
The second publication occurred on or about 14 October 2013, when Mr Williams made the representations set out in Annexure A to the statement of claim to a journalist for the ABC (‘the October publication’). The ABC radio program, Country Hour broadcast these statements (‘the radio publication’), and a recording of the program was available on the ABC website (‘the online publication’).
The plaintiffs further claim that the relevant statements amount to misleading or deceptive conduct in breach of s 18 of the Australian Consumer Law (‘the ACL’). In this respect, TPI is seeking a declaration that the defendants have engaged in misleading or deceptive conduct, as well as damages pursuant to s 236 of the ACL. Mr Dobinson and Mr Ritchie seek both general and aggravated damages. All three plaintiffs seek a permanent injunction restraining the defendants from repeating or re-publishing the relevant statements, as well as costs and interest pursuant to statute.
In their defence, PGT and Mr Williams deny the defamatory nature of the relevant statements. In the alternative, if the Court finds that the relevant statements did convey defamatory imputations, they allege that:
(a) insofar as the relevant statements contained assertions of fact, those assertions are true in substance and in fact; and
(b) insofar as the relevant statements contained expressions of opinion, those expressions are fair comment on a matter of public interest.
In relation to the allegation of misleading and deceptive conduct in breach of the ACL, the defendants deny making any statements to the effect alleged, and deny making any false or misleading representations. They allege that they did not make the relevant statements in trade or commerce, and their conduct did not fall within the scope of s 18 of the ACL. Further, the defendants denied that the plaintiffs suffered loss as alleged in the statement of claim.
Issues on the application
On 11 July 2014, the defendants filed a summons seeking summary judgment or strike out of a number of paragraphs of the plaintiffs’ further amended statement of claim. In particular, the defendants sought orders in relation to:
(a) the misleading or deceptive conduct allegations;
(b) the April publication allegations; and
(c) the October publication, the radio publication, and the online publication allegations.
In relation to the misleading or deceptive conduct allegations, the defendants seek summary judgment, pursuant to r 23.01 of the Supreme Court (General Civil Procedure) Rules 2005 (Vic) (‘the Rules’) or s 63 of the Civil Procedure Act 2010 (Vic) (‘the CPA’). Further, and in the alternative, they seek orders striking out paragraphs 19 to 25 of the plaintiffs’ further amended statement of claim, pursuant to r 23.02 of the Rules. The defendants primarily submitted that the relevant statements were not made ‘in trade or commerce’, but were part of a public policy debate and were statements of a political nature. If I refused summary judgment, the defendants submitted that the pleadings in paragraphs 19 to 25 were vague and insufficiently particularised, and the defendants could not make a proper response to the facts allegedly giving rise to the trading or commercial character of the relevant statements.
In relation to the October publication, the radio publication, and the online publication allegations, the defendants sought summary judgment in their favour pursuant to r 23.01 of the Rules or s 63 of the CPA. Alternatively, they sought orders striking out paragraphs 11 and 12 of the further amended statement of claim pursuant to r 23.02 of the Rules. In relation to the April publication, the defendants sought summary judgment pursuant to r 23.01 of the Rules or s 63 of the CPA. Further, they sought orders striking out paragraph 16 of the further amended statement of claim, pursuant to r 23.02 of the Rules.
The defendants argued primarily that each of the October publications (including the radio publication and the online publication) or the April publication were incapable of conveying the alleged defamatory imputations. In relation to each of the defamatory imputations pleaded in relation to TPI, the defendants contended that:
(a) the allegedly defamatory imputation is not, in fact, defamatory in terms; and/or
(b) a reasonable person would not attribute the defamatory imputation to the relevant statement.
In respect of Mr Ritchie and Mr Dobinson, the defendants contended that none of the relevant statements explicitly stated, suggested, or implied that they were responsible for the conduct of TPI. They submitted that a reasonable person would not attribute any of the defamatory imputations allegedly made with respect to TPI to either Mr Dobinson or Mr Ritchie.
In the alternative, the defendants contended that I should strike out the pleaded defamatory imputations as embarrassing and bad in form.
Relevant Law
The defendants relied on either r 23.01 of the Rules or s 63 of the CPA. Rule 23.01(1) relevantly states as follows:
Where a proceeding generally or any claim in a proceeding—
(a) does not disclose a cause of action;
(b) is scandalous, frivolous or vexatious; or
(c) is an abuse of the process of the Court—
the Court may stay the proceeding generally or in relation to any claim or give judgment in the proceeding generally or in relation to any claim.
Section 63(1) of the CPA states as follows:
Subject to section 64, a court may give summary judgment in any civil proceeding if satisfied that a claim, a defence or a counterclaim or part of the claim, defence or counterclaim, as the case requires, has no real prospect of success.
The test on an application for summary judgment under s 63 of the CPA was set out in Lysaght Building Solutions Pty Ltd v Blanalko Pty Ltd:[1]
(a)the test for summary judgment under s 63 of the Civil Procedure Act 2010 is whether the respondent to the application for summary judgment has a “real” as opposed to a “fanciful” chance of success;
(b)the test is to be applies by reference to its own language and without paraphrase or comparison with the “hopeless” or “bound to fail test” essayed in General Steel;
(c)it should be understood, however, that the test is to some degree a more liberal test than the “hopeless” or “bound to fail” test essayed in General Steel and, therefore, permits of the possibility that there might be cases, yet to be identified, in which it appears that, although the respondent’s case is not hopeless or bound to fail, it does not have a real prospect of success;
(d)at the same time, it must be borne in mind that the power to terminate proceedings summarily should be exercised with caution and thus should not be exercised unless it is clear that there is no real question to be tried; and that is so regardless of whether the application for summary judgment is made on the basis that the pleadings fail to disclose a reasonable cause of action (and the defect cannot be cured by amendment) or on the basis that the action is frivolous or vexatious or an abuse of process or where the application is supported by evidence.
[1]Lysaght Building Solutions Pty Ltd v Blanalko Pty Ltd [2013] VSCA 158, [35].
The Trade and Commerce Point
Paragraphs 19-25 of the plaintiffs’ further amended statement of claim allege that the defendants have engaged in misleading or deceptive conduct in breach of s 18 of the ACL. Section 18 of the ACL states that “[a] person must not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive.” The defendants contended that, assuming each of the plaintiffs’ allegations can be made out, the statements were not made in trade or commerce, and therefore are not capable of breaching this provision of the ACL.
Evidence on the application
The defendants rely on the affidavit of Keith James Rice. Mr Rice deposed that the objectives and purposes of PGT primarily involved the promotion of the interests of the Tasmanian poppy growing industry. He deposed that PGT engaged in the following five primary activities:
(a) consulting with government and statutory authorities in relation to regulations for the licensing and control of poppy growth;
(b) consulting with state, national and international governance organisations in relation to the world supply of and demand for narcotic raw material;
(c) consulting with government on general regulatory issues unrelated to the narcotic aspect of poppy growth;
(d) negotiating the terms of contracts to be offered to Tasmanian poppy growers by two of the three poppy processors operating in Tasmania; and
(e) liaising and negotiating with poppy processors (other than TPI) in relation to operational matters.
Mr Rice deposed that PGT does not buy, sell, supply, or deal in any goods or services. It is a not-for-profit organisation and does not make any payments by way of dividend or any other payments to its members. The defendants submitted that the above factors supported a conclusion that PGT does not engage in ‘trade’ and does not conduct ‘a business’ in the ordinary sense of that term.
Mr Rice also deposed as to the context of the relevant statements, stating that they arose from a proposal by TPI to import poppy straw into Tasmania for processing. The background to this issue was revealed in a letter sent by Dr Peter Patmore, Chairman of the Poppy Advisory and Control Board, to the Tasmanian Attorney-General dated 8 November 2011, a redacted version of which was exhibited to Mr Rice’s affidavit. This letter revealed the following facts:
(a) In November 2011, TPI held a licence to manufacture poppy-based medications.
(b) TPI had sought a modification of its Tasmanian licence, which would facilitate the importation of poppy material pursuant to Federal Government regulations. The third plaintiff, Ritchie, had asserted that, due to poor agricultural seasons, it wished to import poppy capsules from Turkey.
(c) The board considered that the request by TPI had significant long-term ramifications locally, nationally and internationally.
The defendants also relied on the following documents, exhibited to the affidavit of Mr Rice:
(a) A letter from the Tasmanian Department of Health and Human Services to PGT, dated 4 January 2012, inviting a submission in relation to TPI’s application for a modification of their licence.
(b) Submissions from PGT and the Tasmanian Farmers and Graziers Associates to the Department of Health and Human Services.
(c) Notes of a meeting between PGT and Ministers from the Tasmanian Government held on 5 June 2012, at which various issues relating to the modification of the licence were discussed.
(d) A press release by a Tasmanian Government Minister announcing the Government’s support for TPI’s application to import poppy straw from overseas dated 1 August 2012.
(e) A press release by Federal Ministers expressing concern about the Tasmanian Government’s decision.
(f) Various media articles reporting on the Federal Ministers’ press release and the issues raised by them relating to the Tasmanian Government’s decision.
(g) A submission by PGT to the Tasmanian Minister for Primary Industries opposing TPI’s proposal to import poppies, dated 14 August 2012.
(h) A copy of Hansard demonstrating that the issue was raised in the Tasmanian Parliament on 21 August 2012, and further media articles relating to this issue dated 23 August 2012.
(i) A letter from the Minister for Primary Industries to PGT responding to its August submission dated 3 September 2012.
(j) An invitation from a select committee of the Legislative Council in Tasmania seeking submissions in relation to its inquiry into the decision to allow the importation of poppy capsules by TPI dated 19 October 2012.
(k) A letter from the Minister for Primary Industries to PGT stating that the Tasmanian Government had given in principle support to TPI’s proposal on a one-off basis dated 13 December 2012.
(l) A report entitled ‘Factors influencing farmer decisions to grow poppies’, which was jointly released by the Tasmanian Department of Primary Industries, Parks, Water and Environment and PGT in January 2013.
(m) A press release commenting on the findings of the report, which was issued by the Minister for Primary Industries on 1 March 2013.
(n) A letter from PGT to the Minister for Primary Industries dated 22 May 2013, raising further issues in relation to TPI’s proposal.
(o) A response from the Minister for Primary Industries dated 13 June 2013.
PGT Submissions
Application for summary judgment
The defendants submitted that the relevant statements comprised part of, and were made in the context of, the public debate about the regulation of the poppy cultivation and processing industry in Tasmania. The defendants said that, in substance, TPI was seeking approval to import raw materials from Turkey to ensure that there was sufficient supply to justify the further investment necessary to meet increased global demand. They submitted that the relevant statements were merely part of a debate in which PGT was:
(a) advising caution against disruptions to the long-standing supply arrangements in the poppy cultivation and processing market, which is closely regulated both locally and internationally; and
(b) arguing that the true effect of TPI’s proposal would be to drive down the price received by Tasmanian poppy growers.
The defendants argued that there was no ‘transaction’ with which the relevant statements were concerned, and that the political debate about the regulatory framework for poppy cultivation and processing did not bear the commercial character required by s 18 of the ACL. They contended that a distinction was recognised in the authorities between conduct ‘in relation to’ trade and commerce and conduct ‘in’ trade or commerce, submitting that the relevant statements fell into the former category. The decision of the Full Court of the Federal Court of Australia in Village Building Co Ltd v Canberra International Airport Pty Ltd (‘Village Building’)[2] was authority for the submission that the relevant statements are properly characterised as ‘political’, in the sense that they were designed either to influence public opinion or to achieve a particular regulatory outcome.
[2](2004) 139 FCR 330.
The defendants submitted that the plaintiffs’ assertions that PGT was engaged in the ‘business’ of representing, advocating and pursuing the commercial interests of Tasmanian poppy farmers, was beside the point. They argued that the real question was whether the relevant statements were made in the context of conduct that has the requisite ‘trading and commercial character’. Accepting that a professional lobbyist, paid to advance a political cause favourable to the interests of a client may well be engaging in conduct of a trading or commercial character, the defendants argued that this consequence arose because the conduct was engaged in in exchange for a commercial reward, which was not the situation at hand. The defendants submitted that PGT was not a paid lobbyist, and did not conduct commercial or trading operations or operate for a profit. Its influence and skill in conducting public campaigns was not for sale. They argued that nothing about PGT’s internal structure or operations suggested that it had a trading character itself, and that it did not obtain such a character by engaging in the debate regarding the regulation of the poppy industry.
Strike out application
In the alternative, the defendants argued that paragraphs 19 to 25 of the further amended statement of claim were embarrassing. In particular, they contended that the plaintiffs’ allegation that PGT was engaged in the business of representing, advocating for, and pursuing the commercial interests of Tasmanian poppy farmers was inherently ambiguous and uncertain. They argued that what was intended by the allegation that PGT was ‘engaging in a business’ should be made clear, as the defendants must be put on notice of the facts that the plaintiffs say demonstrate that PGT’s conduct had the necessary trading or commercial character.
Further, the defendants submitted that the imputations allegedly conveyed by the relevant statements were embarrassing and incapable of arising as a matter of law in the following particulars.
(a)At paragraph 19 of the further amended statement of claim, the plaintiffs alleged that the October publication imputed that TPI had engaged in certain conduct. The defendants contended that the words of the October publication did not impute that conduct to TPI, either on their own or in combination with the context in which the October publication was made.
(b)At paragraph 22 of the further amended statement of claim, the plaintiffs alleged that the April publication imputed that TPI had ‘perpetuated an untruth’. The defendants contended that such a pleading was impermissibly vague, as it was impossible to say what the plaintiffs say the defendants represented TPI had done. They further argued that testing the falsity of a representation that a person had perpetuated an untruth ‘invites forensic difficulty’. Finally, the defendants argued that the particulars accompanying paragraph 22 did not make it clear how the imputations were conveyed.
TPI Submissions
Application for summary judgment
The plaintiffs submitted that the evidence disclosed that PGT engaged generally in a commercial or trading enterprise. They submitted that the poppy growing industry in Tasmania involves approximately 700 growers and generates over $100 million in revenue each year. The plaintiffs contended that, while PGT did not operate for a profit, it was directly involved in commercial activity: generating revenue through membership fees, raising and investing money, paying fees, salaries, or wages to its employees and reimbursing them for expenses. More importantly, the plaintiffs pointed to the fact that PGT’s membership fees are calculated as a proportion of gross payments made to members by poppy processors – TPI’s competitors. Thus, PGT’s revenue was dependent on the commercial success of its members, and PGT had a commercial interest in maintaining or enhancing the profits of its members.
The objects of PGT, as disclosed in the affidavit of Mr Rice, included protecting, promoting and enhancing the interests of poppy growers, negotiating fair and equitable contract conditions on behalf of poppy growers and acquiring and disseminating information concerning production and markets. PGT undertakes collective bargaining on behalf of Tasmanian poppy growers in order to negotiate the terms of trade offered by poppy processors. It also liaises and negotiates with poppy processors on behalf of Tasmanian poppy growers in relation to operational issues connected with the production and supply of poppies. The plaintiffs submitted that all of these activities were inherently commercial in nature or indicators of an organisation that was involved in a commercial enterprise.
The plaintiffs contended that the relevant statements were not made purely in the context of a policy or political debate, and PGT’s conduct was arguably part of a commercial campaign on behalf of Tasmanian poppy growers. They submitted that PGT existed, at least in part, to protect and promote the market for the supply of poppies and poppy straw by Tasmanian growers, to the exclusion of competition from alternative suppliers of poppies that might reduce Tasmanian growers’ revenue and market share. They pointed to PGT’s recognition that foreign jurisdictions might seek to extract a competitive advantage over Tasmanian growers, as well as PGT’s estimate that the commercial impact of importation on Tasmanian growers would be approximately $2.5 million. The plaintiffs argued that the importation of poppies and poppy straw was of concern solely because of the commercial risk that it posed to Tasmanian growers and, by extension, to PGT.
Finally, the plaintiffs contended that, at the time the relevant statements were made, there was a looming risk that all of the major Tasmanian poppy processors would resort to importation for their supply of poppies and poppy straw. They submitted that, in response to this threat to its members, PGT was engaging in an ongoing campaign to dissuade processors from adopting this course. Thus, the plaintiffs submitted that the relevant statements were made at a time when PGT had a commercial (and presumably financial) motive for promoting the purchase of Tasmanian-grown poppies and poppy straw by the Tasmanian processors.
Strike out application
The plaintiffs invited the Court to reject the defendants’ submissions that paragraphs 19 and 22 of the further amended statement of claim were impermissibly vague and embarrassing. Further, they submitted that the particulars of the ‘trade or commerce’ aspect of the pleadings had been sufficiently clarified by the plaintiffs’ submissions on the summary judgment application.
Submitting that I should find that the relevant statements were capable of giving rise to the pleaded imputations as a matter of law, the plaintiffs contended that the relevant statements could convey to a reasonable person the imputation that TPI has made false statements about the Tasmanian supply shortage in order to justify its importation of poppies from Turkey. They submitted that it was open to a jury to find that such an imputation negatively affects the plaintiffs’ reputations. Similarly, the plaintiffs argued that it was open to a jury to find that the defendants’ representation that TPI provided an inferior service to that of their competitors reflected in a defamatory sense on the plaintiffs’ conduct of their business.
In relation to the perpetuation of an untruth, the plaintiffs argued that there was no vagueness or ambiguity in the pleadings. An interview with Mr Ritchie was broadcast immediately prior to the April publication, in which Mr Ritchie stated repeatedly that TPI was concerned that there was a lack of security of supply in Tasmania, this being the reason for its proposal to import poppies. The April publication followed immediately on the conclusion of this broadcast, and Mr Williams expressly contradicted these assertions and claimed that the true purpose of TPI’s proposal was to drive down prices. The plaintiffs contended that it was open to a tribunal of fact in these circumstances to find that the April publication would convey to a reasonable person that Mr Ritchie’s earlier assertions were false and were made as a false justification of TPI’s proposal to import poppies from outside Australia.
Trade and commerce ‑ principles
I was referred to a number of cases that were relied on by the parties, but need only refer to three decisions. The first, Concrete Constructions,[3] outlines the core principles relevant to the ‘trade and commerce’ requirement in s 18 of the ACL (the current equivalent of what used to be s 52 of the Trade Practices Act 1974 (Cth) (‘the TPA’)). Tobacco Institute,[4] provides an analogy for when organisations will be held to be engaging in conduct that is ‘in trade or commerce’. Village Building[5] provides an example of the circumstances in which an organisation will be merely engaging in a ‘political debate’ rather than engaging in activities of a trading or commercial character. The third decision was published after argument of the application. Murphy v State of Victoria[6] emphasises the need for the question of whether conduct is ‘in trade or commerce’ to be determined on the evidence at trial.
Concrete Constructions[7]
[3]Concrete Constructions (NSW) Pty Ltd v Nelson (1990) 169 CLR 594.
[4]Tobacco Institute of Australia Ltd v Australian Federation of Consumer Organisations Inc (1992) 38 FCR 1.
[5]Village Building Company Ltd v Canberra International Airport Pty Ltd (2004) 139 FCR 330.
[6][2014] VSCA 238.
[7]Concrete Constructions (NSW) Pty Ltd v Nelson (1990) 169 CLR 594.
The plaintiff was an employee of the defendant. In the course of his employment, a foreman of the company instructed him to remove a grate from the entry to an air-conditioning shaft. The foreman told him that the grate was secured by three bolts on each side, and instructed him how to remove the bolts safely. However, the grate was not secured in any manner and the plaintiff fell down the air-conditioner shaft suffering serious injuries. The plaintiff instituted proceedings in the Federal Court, alleging that his injuries were caused by the misleading or deceptive conduct of the foreman – in breach of s 52 of the TPA – for which the defendant was vicariously liable.
At first instance, the preliminary question of whether the claim as pleaded disclosed a cause of action for breach of s 52 of the TPA was referred to a hearing before the Federal Court, and was answered in the affirmative. On appeal to the High Court, the defendant argued that the alleged conduct was not within the scope of s 52 on the basis that the provision was directed specifically towards consumers – being, as it was, in a Part of the TPA entitled ‘Consumer Protection’ – and required that the conduct complained of was ‘in trade or commerce’. Concrete Constructions argued that Nelson was not a ‘consumer’ for the purposes of the provision, and that the conduct complained of was not ‘in trade or commerce’.
The majority[8] rejected the first argument and in relation to the second argument, held that the phrase ‘in trade or commerce’ had a restrictive application, and was capable of two different meanings:
As a matter of language, a prohibition against engaging in conduct “in trade or commerce” can be construed as encompassing conduct 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 … 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 … the words “in trade or commerce” refer to “the central conception” in which corporations may engage in the course of, or for the purposes of, carrying on some overall trading or commercial business.[9]
The majority concluded that the phrase ‘in trade or commerce’ was to be construed as having the latter meaning, being restricted to conduct towards a person with whom the defendant has or may have dealings in the course of its trading or commercial activities or transactions which, of their nature, bear a trading or commercial character.[10]
[8]Mason CJ, Deane, Dawson, and Gaudron JJ.
[9]Ibid 602-3.
[10]Ibid 604.
Brennan J agreed with the majority in part. His Honour said:
Although I agree with the majority that the phrase “in trade or commerce” qualifies the operation of s 52, I am respectfully unable to agree that that phrase restricts the operation of s 52 to conduct which is in itself of a trading or commercial character. … if misleading or deceptive conduct occurs in the course of carrying on an activity or carrying out a transaction of a trading or commercial character, the test imported by the phrase “in trade or commerce” is satisfied.[11]
The remaining judgments need not be discussed.
Tobacco Institute[12]
[11]Ibid 606.
[12]Tobacco Institute of Australia v Australian Federation of Consumer Organisations (1992) 38 FCR 1.
The Australian Federation of Consumer Organisations instituted the proceedings against the Tobacco Institute based on an advertisement, in which the following statement was made: “And yet there is little evidence and none which proves scientifically that cigarette smoke causes disease in non-smokers”. The advertisement was targeted specifically towards non-smokers, and was intended to dispel concerns relating to passive smoking. The trial judge held that the advertisement was conduct in breach of s 52 of the TPA and granted an injunction. On appeal to the Full Court, the Tobacco Institute argued that the conduct complained of did not take place ‘in trade or commerce’.
The Federation contended that the advertisement was conduct in trade or commerce because the advertisement concerned an article of commerce (cigarettes) and that the purpose of the advertisement was to persuade members of the public that passive smoking was not harmful. In discussing whether the advertisement met the condition of being ‘in trade or commerce’, Sheppard J concluded that defendant’s purpose in placing the advertisement was commercial gain.
Hill J, with whom Foster J agreed, considered at length whether the advertisement was published ‘in trade and commerce’, and agreed with Sheppard J. Discussing the requirement that the conduct be ‘in trade or commerce’, Hill J stated:
Concrete Constructions does not limit the category of acts which are in trade or commerce to acts of sale and purchase; nor does it limit the category of companies which may act in trade or commerce to companies which buy or sell. It is true that the court expressed the view that the conduct impugned by s 52 must be conduct within “the central conception of trade and commerce” but their Honours indicate shortly thereafter what is meant by “central conception” in this context. Of particular significance here is that their Honours point specifically to conduct of a corporation representing or promoting the interests of certain others as included within the “central conception”. There can be no doubt that a corporation, formed to promote the interests of a particular industry or whose activities are directed at representing members of that industry in promotional activities, acts “in trade or commerce” when conveying representations about that industry’s product to the general public.[13]
Village Building[14]
[13]Ibid 44 (emphasis in original).
[14]Village Building Company Ltd v Canberra International Airport Pty Ltd (2004) 139 FCR 330.
In this case, Canberra International Airport had reported estimated forecasts of aircraft noise levels near the airport up until 2050. At the time these forecasts were made, there was an ongoing public debate as to whether land to the south of the airport (Tralee) should be re-zoned as residential land. The plaintiff argued that the defendant had inflated its forecasted noise levels to advance its interests in preventing the planning authorities from re-zoning the land as residential, which would have inhibited the defendant’s operation of the airport. At first instance, it was held that the conduct was not in breach of s 52 of the TPA, as it was not conduct ‘in trade or commerce’ within the meaning of that section, and this decision was upheld on appeal.
In determining whether the conduct of the Airport was ‘in trade or commerce’ in accordance with the principles laid down in Concrete Constructions, the Court made the following statements:
Some of the representations were made by [the defendant] to the Minister in the course of requesting and then withdrawing a request for Ministerial approval of a draft variation to the Year 2020 Master Plan for Canberra Airport. … The relationship between the Minister and [the defendant] was not of a trading or commercial character; if anything, it was a relationship between a regulator and a regulated industry or business …
…
The remaining representations relied on by [the plaintiff] were made by [the defendant] to members of the public and to elected councillors and parliamentarians as part of a campaign to resist the application to rezone Tralee to facilitate residential development. There was no relevant trading or commercial relationship between [the defendant] and the persons to whom the representations were made … The representations could not be described as promotional activities designed to persuade consumers to use the services offered at Canberra Airport. Nor were they made as part of a process designed to secure approval to a commercial transaction or dealing, such as the sale of a component of [the defendant’s] business …[15]
[15]Ibid 341-2, [51]-[53].
Analysis
The question of whether an organisation is acting ‘in trade or commerce’ will turn very much on the circumstances established at trial. As outlined in Tobacco Institute and Village Building, it will not be sufficient simply to look at the type of organisation involved, or even to analyse its relationship with the person to whom the statements were made. Rather, it is necessary to look at the organisation’s purposes in making the statements, and the overall context within which they were made.
On the evidence on the application, it is clear that, at the time the relevant statements were made, there was an ongoing policy debate within Tasmania in relation to the regulation of the poppy growing and processing industry. That much can be deduced from the involvement of both Federal and State Government Ministers, who invited submissions from organisations in relation to the modification of TPI’s licence. On the other hand, the facts of this case when established at trial may bear close analogy with those in Tobacco Institute. That is, PGT may be described as being engaged in conduct involving the ‘representation or promotion’ of others within a commercial industry. Poppy straw is a commercial product, as are cigarettes, and PGT may be seen by the tribunal of fact to have been actively promoting the purchase of poppy straw from its members, rather than from overseas. The evidence at trial may justify a conclusion that PGT stands to gain directly from such promotion, as its membership fees increase in proportion with increased profits by its members. PGT’s contention in the publications was that the true effect of TPI’s proposal would be to drive down the price of poppy straw, thus adversely affecting the commercial interests of its members.
This is not an issue that should be determined summarily. On the evidence on the application, I am not satisfied that the plaintiffs’ case in this respect has no real prospect of success or that its prospects of success are ‘fanciful’. I consider that the question of whether the defendants were engaged in ‘trade or commerce’ at the time the relevant statements were made is one that should be determined by the tribunal of fact at trial. Summary judgment is refused.
Since this application was argued, the Court of Appeal considered the phrase ‘in trade or commerce’ in Murphy v State of Victoria.[16] The approach taken to the issue before the Court of Appeal, although not a summary judgment application, fortifies me in my view that having demonstrated that their contentions are not fanciful, the plaintiffs are entitled to the determination of the tribunal of fact on the evidence led at a trial. In Murphy, the trial judge determined preliminary questions under r 47.04 in a proceeding where the plaintiff alleged that the defendants had made and were continuing to make representations in connection with a major infrastructure construction project, the East West Link Stage One motorway. Those questions included whether the representations were made in the course of the defendants carrying on a business, and whether they were made in trade and commerce.
[16][2014] VSCA 238.
The appeal was allowed and the proceeding remitted to the Trial Division on grounds that included that the trial 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. The court considered that 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 when the separate questions should have been resolved on the basis of evidence in the usual way. The court said:[17]
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.
[17]Ibid, [42].
In Murphy, the distinction in issue was between conduct of a commercial character and conduct that was purely governmental functions, but that distinction bears close analogy with the distinction argued here, which seeks to deny the impugned conduct of the defendants a characterisation of being in trade or commerce. The court emphasised the importance of bearing in mind that the two characterisations of impugned conduct may co-exist.[18] The court said:[19]
[18]Ibid, [58].
[19]Ibid, [59].
... 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.
And later, the court added:[20]
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.
Dealing specifically with the question of the factual basis for determining the issue of in trade or commerce, the court said:[21]
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’. 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. 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.
[20]Ibid, [63].
[21]Ibid, [69].
In relation to the strikeout application, for similar reasons to those set out above, I do not consider that it is appropriate to strike out paragraphs 19-25 of the further amended statement of claim. The allegations in respect of the trading and commercial character of the defendants’ conduct are tolerably clear, particularly in light of the plaintiffs’ submissions set out above. Paragraphs 19-25 of the further amended statement of claim are not embarrassing, ambiguous, or uncertain.
The defamation pleadings
Paragraphs 6-18 of the further amended statement of claim set out the plaintiffs’ allegations in relation to the defamatory imputations conveyed by the April publication, the October publication, the radio publication and the online publication. The defendants argued that the defamatory implications as pleaded were incapable of arising, as a matter of law, from the relevant statements.
The imputations as pleaded
The plaintiffs alleged that the October publication, the radio publication, and the online publication conveyed the following defamatory imputations:
(a) that Mr Dobinson and Mr Ritchie were responsible for TPI making false public statements by suggesting that there was an insufficient supply of poppies in Tasmania to meet demand, whereas there was in fact no such insufficiency of supply;
(b) that Mr Dobinson and Mr Ritchie were responsible for TPI exaggerating an alleged shortage of suitable land for poppy farming in Tasmania in order to justify TPI’s proposal to obtain poppies from outside Tasmania, which proposal would come at the expense of Tasmanian poppy growers;
(c) that Mr Dobinson and Mr Ritchie were responsible for TPI contributing to a position of panic within the Tasmanian poppy growing industry, by suggesting that there was a shortage of suitable land in Tasmania for poppy farming by reason of one week of rain, when in fact there was no such shortage of land;
(d) that Mr Dobinson and Mr Ritchie were responsible for TPI being deliberately evasive about the amount of land in Tasmania that TPI had secured under contract for the purpose of poppy farming in order to justify TPI’s proposal to obtain poppies from outside Tasmania, which proposal would come at the expense of Tasmanian poppy growers; and
(e) that Mr Dobinson and Mr Ritchie were responsible for TPI offering an inferior service to that of other poppy processors, in that TPI did not in 2013 provide advice to Tasmanian poppy growers as to how to best grow their crops, whereas other poppy providers did provide such advice.
The plaintiffs further alleged that the April publication conveyed the defamatory imputation:
(f)that Mr Dobinson and Mr Ritchie were responsible for TPI knowingly perpetuating an untruth concerning an alleged lack of security of supply from poppy farmers in Tasmania, in order to justify TPI’s proposal to obtain poppies from outside Tasmania, which proposal would come at the expense of Tasmanian poppy growers by driving prices down.
The test
The test for when a defamatory imputation will be struck out on the basis that it is incapable of arising as a matter of law was restated in Sali v Australian Broadcasting Corporation (‘Sali’).[22] In that case, Beach J, as his Honour then was, approved of the decision of Hunt J in Farquhar v Bottom:[23]
In deciding whether the matter complained of is capable of conveying to the ordinary reasonable reader the imputations relied upon by the plaintiff, I must be guided and directed by the test of reasonableness. I must reject any strained, or forced, or utterly unreasonable interpretation. I must proceed upon the basis that the ordinary reasonable reader is a person of fair, average intelligence; who is neither perverse, nor morbid or suspicious of mind, nor avid for scandal.[24]
[22][2013] VSC 388.
[23][1980] 2 NSWLR 380.
[24]Sali v Australian Broadcasting Corporation [2013] VSC 388, [18] (citations omitted).
It is necessary that I determine whether the pleaded imputations are capable of being conveyed to an ordinary, reasonable reader who meets the criteria set out above. I bear in mind the distinction between the reader’s understanding of what the publication is actually saying and a judgment or conclusion that a reader may reach after reading the publication because of his or her own beliefs or prejudices. Mason CJ, in Mirror Newspapers Ltd v Harrison,[25] identified and discussed this distinction.
[25](1982) 149 CLR 293, 301; see also Soultonov v The Age Company Ltd & Anor (2009) 23 VR 182, [11].
PGT Submissions
The defendants contended that the October publication, the radio publication, and the online publication did not assert or attribute to any of the plaintiffs an act or condition that is likely to injure them. They argued that the imputations as pleaded were strained and unreasonable and did not arise from the relevant statements in the publications. Further nothing in the publications directly asserted that Mr Dobinson or Mr Ritchie were responsible for the alleged conduct of TPI. Any responsibility for TPI’s conduct was a result of the offices they held, and it was unreasonable to suggest that the holding of those offices meant that the relevant statements were defamatory of Mr Ritchie or Mr Dobinson.
In particular, the defendants contended that the first five imputations set out above were an unreasonable interpretation of the relevant statements in the publications. They submitted that no assertion was made in those publications that TPI had made any false statements and that, even if such an assertion had been made, this assertion on its own was not sufficient to give rise to a defamatory imputation without an assertion that such false statements were made intentionally or deliberately. In relation to the remaining defamatory imputations, PGT submitted that no reasonable person would interpret the relevant statements as giving rise to such imputations.
In relation to imputation (e), the defendants admitted that the relevant statements in the October publication, the radio publication, and the online publication conveyed such an imputation. However, they said that it was not defamatory, without more, to assert that a business offers an inferior service. The defendants argued that in order to be defamatory, such an imputation would need to be combined with an imputation, for example, that the inferior services were offered for a similar or greater price, or were asserted to be of equal value to a competitor’s service.
Finally, the defendants submitted that the words “which proposal would come at the expense of Tasmanian poppy growers” in imputations (b) and (d) were surplus and embarrassing.
In relation to imputation (f), the defendants contended that the relevant statements in the April publication did not assert that Mr Dobinson and Mr Ritchie were responsible for the conduct of TPI. They said that the ‘conduct’ of TPI that was claimed to be defamatory was the conduct of ‘knowingly perpetuating an untruth’, and argued that no reasonable person would consider that the relevant statements gave rise to such an imputation. Finally, the defendants argued that the manner in which this imputation is pleaded obscured the conduct for which Mr Dobinson and Mr Ritchie were said to have been responsible.
The defendants put similar arguments to support the conclusion that, if the pleaded defamation claims were tenable, I should strike out these paragraphs as each of the imputations reflected a strained and unreasonable forcing of the words to convey the pleaded defamatory meanings. The allegations were characterised as obscure and vague, lacking the required clarity to allow the defendants to respond. The defendants argued that, if the relevant statements did give rise to defamatory imputations, the pleader has failed to capture the proper imputations, and the imputations pleaded were bad in form and would embarrass a fair trial of the proceeding.
TPI Submissions
Attribution of conduct to Mr Ritchie and Mr Dobinson
TPI submitted that it was open to the tribunal of fact at trial to find that a reasonable person would understand that the relevant statements refer to conduct engaged in by TPI at the direction of Mr Ritchie and Mr Dobinson. TPI pointed to the fact that Mr Ritchie was explicitly referred to in the April publication using the words “TPI Enterprises’ CEO”, in a publication that occurred immediately after broadcast of an interview with Mr Ritchie to the same audience. TPI submitted that it is a corporation and cannot engage in conduct otherwise than through its employees and officers, and asserted that a reasonable member of the public would understand this. The plaintiffs submitted that at trial they would be entitled to rely on these facts to support an assertion that any reference to the conduct of TPI would be understood by an ordinary person as a reference to conduct engaged in at the direction of Mr Dobinson and Mr Ritchie as TPI’s Chairman and its CEO and Managing Director, respectively.
David Syme & Co v Canavan,[26] establishes that the test for whether words that do not specifically name a plaintiff nonetheless refer to him or her was whether the words were such as reasonably in the circumstances would lead persons acquainted with the plaintiff to believe that he or she was the person referred to. In Steele v Mirror Newspapers Ltd,[27] the court held that the standard of reasonableness is not high, and that it is sufficient for there to be only one person who reasonably could recognise the plaintiff as the person referred to. The plaintiffs submitted that the issue should be left to be determined at trial.
[26](1918) 25 CLR 234.
[27][1974] 2 NSWLR 348, 264, 374. See also Morgan v Oldham Press Ltd [1971] 1 WLR 1239, and Gardiner v Nationwide News Ltd [2007] NSWCA 10, [44].
The October, radio and online publications
The plaintiffs submitted the assertion that TPI made false statements was a defamatory imputation, contending that even if false statements were made innocently, it would still be open to a tribunal of fact to find that the making of false statements could negatively affect the plaintiffs’ reputation. Section 18 of the ACL provides that it is unlawful to make a misleading or deceptive statement in trade or commerce, even innocently. A tribunal of fact could reason that a reasonable person would think less of those who engage in unlawful conduct.
The plaintiffs submitted it was plainly open that a tribunal of fact could find that imputation (a) could arise from the relevant statements pointing to the actual words used, in which the assertion of a supply shortage is raised and labelled an exaggeration and false. The words are juxtaposed with a rhetorical question posed to TPI. The plaintiffs asserted that this combination of statements is capable of giving rise to an imputation that TPI made assertions relating to the supply shortage that are false. The plaintiffs submitted that the publications involved a continued assertion by the defendants that there was no supply shortage with repeated questioning of TPI’s ‘real agenda’ in sourcing poppies from outside of Tasmania. The plaintiffs repeated these submissions in respect of the remainder of the defamatory imputations claimed.
In relation to imputation (e), the plaintiffs referred to South Hetton Coal Ltd v North-Eastern News Association Ltd,[28] in which a distinction was drawn between a criticism of a business’ goods or services and a criticism of the way in which a business is conducted. The plaintiffs submitted that this was not a case of criticism of the former kind. The relevant statements asserted an inferior service by the failure to give beneficial advice to Tasmanian poppy growers, a matter that was directly within the plaintiffs’ power and discretion. The second and third plaintiffs contended that it was open to find at trial that the imputation conveyed was defamatory of them personally in their conduct of the business.
[28][1894] 1 QB 133.
The April publication
The plaintiffs submitted that the pleaded defamatory imputation (f) (the April publication) was clearly capable of being conveyed to a reasonable person by the relevant statements, particularly in the context in which the statements were made. They pointed to the fact that, immediately prior to the April publication, the ABC broadcast an interview with Mr Ritchie to the same audience. In that interview, Mr Ritchie stated repeatedly that TPI was concerned that there was a lack of security of supply in Tasmania, and that this was the reason for its proposal to import poppies. Following on, Mr Williams then expressly referred to Mr Ritchie’s statements and contradicted them. He asserted that there was no lack of security of supply, that there was in fact a potential surplus of supply, and that the real reason for TPI’s proposal to import poppies was to drive prices down. The plaintiffs submitted that it was open to a tribunal of fact to find that a reasonable person would interpret the relevant statements in this context as implying that Mr Ritchie’s assertion that there was a lack of security of supply was untruthful and had been made in order to provide false justification for the company’s proposal to import poppies from outside Tasmania.
Analysis
Adopting the test outlined in Sali, in my view, the imputations pleaded by the plaintiffs are not strained, forced or utterly unreasonable. It is open to a tribunal of fact to determine that the defamatory imputations would have been conveyed to an ordinary, reasonable person who is “of fair, average intelligence; who is neither perverse, nor morbid or suspicious of mind, nor avid for scandal”.[29] It is also open to a tribunal of fact to consider that the imputations had a negative impact on the reputations of the second and third plaintiffs. Reputation is a broad concept.[30]
[29]Sali v Australian Broadcasting Corporation [2013] VSC 388, [18].
[30]Berkoff v Burchell [1996] 4 All ER 1008, 1018 cited with approval in Radio 2UE Sydney Pty Ltd v Chesterton (2009) 238 CLR 460, [36].
I do not consider that, on the evidence before me I could conclude that no reasonable person would understand the relevant statements to refer to conduct engaged in by TPI at the direction of Mr Ritchie and Mr Dobinson. The threshold is not high. It would be sufficient for there to be only one person who reasonably could recognise them as the persons referred to in order for the test to be satisfied. The test outlined in David Syme, requires merely that persons acquainted with the plaintiffs would be led to believe that the relevant statements were referring to conduct of Mr Ritchie and Mr Dobinson. I am not satisfied that no such person exists. Officers and managers of corporations may be sufficiently identified by a reference to the name of the corporation.[31] This is a matter for trial.
[31]Mirror Newspapers Ltd v World Hosts Pty Ltd (1979) 141 CLR 632, 640, 645-6.
Conclusion and orders
Having considered the submissions of the plaintiffs and the defendants, as well as the key authorities outlined above, I do not consider that this is a case warranting summary judgment under either r 23.01 of the Rules or s 63 of the CPA. I consider that, even on the least stringent test – as explained in Lysaght – the plaintiffs’ chance of success in this case cannot be characterised as fanciful.
I do not consider that an order striking out paragraphs 11 and 12, 16 or 19-25 of the further amended statement of claim is warranted in the circumstances. These paragraphs are not scandalous, frivolous, or vexatious, are not likely to prejudice, embarrass, or delay the fair trial of the proceeding, and are not otherwise an abuse of process.
I will refuse the relief sought in the defendants’ summons dated 11 July 2014.
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