Wallis v Downard-Pickford (North Queensland) Pty Ltd

[1994] HCA 17

HIGH COURT OF AUSTRALIA

DEANE, DAWSON, TOOHEY, GAUDRON AND McHUGH JJ

WALLIS v DOWNARD-PICKFORD (NORTH QUEENSLAND) PTY. LTD.

(1994) 179 CLR 388

13 April 1994

Constitutional Law (Cth)—Trade Practices

Constitutional Law (Cth)—Inconsistency between Commonwealth and State laws—State law limiting liability of carriers for loss of or injury to goods—Commonwealth law implying warranty into contracts that services will be rendered with due care and skill—Whether warranty carries full contractual liability for breach—The Constitution (63 and 64 Vict. c. 12) s. 109—Carriage of Goods by Land (Carrier's Liabilities) Act 1967 (Q.), s. 6(1)—Trade Practices Act 1974 (Cth), s. 74(1). Trade Practices—Consumer protection—Implied warranty that services will be rendered with due care and skill—Exclusion of warranty where services provided under contract for transport of goods for purpose of occupation of consignor—Contract for transport of police officer's possessions to new post—Trade Practices Act 1974 (Cth), s. 74(1), (3)(a).

Orders

Appeal allowed with costs.

Set aside in order of the Court of Appeal of Queensland and in lieu thereof order that the appeal to that Court be dismissed with costs.

Decisions

DEANE AND DAWSON JJ Subject to one qualification, we agree with the
judgment of Toohey and Gaudron JJ

2. The qualification relates to their Honours' reasons for the conclusion that the contract in the present case was not excluded from the operation of s.74(1) of the Trade Practices Act 1974 (Cth) for the reason that it was a contract of the kind referred to in s.74(3)(a) of the Act. We agree with that conclusion. However, we do not think that it is helpful in the present case to ask whether the contract was "entered into as an ordinary incident of the carrying on of (a) particular trade, business or profession then being carried on or proposed to be carried on" ((1) Collins v. Parker, unreported, Supreme Court of New South Wales, 11 May 1984 at 18 per Lee J; see, also, Ellison v. Vukicevic (1986) 7 NSWLR 104 at 111 per Young J). Section 74(3)(a) focuses on the purpose of the transportation itself and not on the purpose for which the relevant contract was "entered into". In most cases, no doubt, the distinction will be unimportant. It does not, however, appear to us to be unimportant in the present case.

3. In the present case, both the Commissioner and the appellant, at their different levels, "carried on or engaged in" the "occupation" of a police officer. The occasion of the transportation of the relevant goods from Ayr to Dalby was the transfer of the appellant's place of service from one town to the other. It is, in our view, at least arguable that the Commissioner entered into the contract with the respondent "as an ordinary incident" of his occupation as Commissioner of Police. Nonetheless, it cannot, in our view, properly be said that the actual transportation itself answered the description of being "for the purposes of" the occupation of police officer "carried on or engaged in" by either the appellant or the Commissioner. If the transportation had been of police property and equipment used in the course of the discharge of police duties, the transportation might well have been seen as answering that description. The transportation was, however, of the appellant's furniture and personal effects. The purpose of it was to remove the private property of the appellant and his family from their former family home in Ayr to their new family home in Dalby. That purpose was a private or domestic one. The fact that it was the Commissioner, and not the appellant, who entered into the contract with the carrier pursuant to which the transportation was effected did not alter the purpose of the transportation itself. The subjective purpose of the Commissioner may have been to assist the appellant in changing his family home on the change of his place of duty. Nonetheless, the purpose of the transportation itself remained
the private or domestic one which we have identified.

TOOHEY AND GAUDRON JJ The appellant is a member of the Queensland Police Force. The respondent is a "carrier" as that term is defined by the Carriage of Goods by Land (Carriers' Liabilities) Act 1967 (Q.) ("the Queensland Act") ((2) The Queensland Act was repealed by the Carriage of Goods by Land (Carriers' Liabilities) Repeal Act 1993 (Q.) which came into operation on 27 August 1993.). It is also a "trading corporation" for the purposes of the Trade Practices Act 1974 (Cth).

2. On or about 1 July 1987 the Commissioner of Police entered into a contract with the respondent for the carriage of the appellant's goods from Ayr to Dalby, upon the respondent's standard printed conditions.
The contract was for the benefit of the appellant whom the Commissioner had transferred in the course of his employment. The
appellant's goods were damaged in transit as a result of the respondent's failure to use due care and skill. The damage was quantified at $1,663.47.

3. The Supreme Court of Queensland was asked on originating summons to determine as a question of law whether the appellant could rely upon ss.68 and 74 of the Trade Practices Act to avoid the limitation of liability contained in s.6(1) of the Queensland Act. Because the proceedings took this form it is not possible to say whether the appellant intended to sue the respondent in negligence, for breach of an implied term in the contract of carriage, for breach of warranty implied by the Trade Practices Act, or to rely upon all these causes of action. The reason for the preliminary proceedings no doubt lies in s.5 of the Queensland Act which limits the liability of a carrier to "the bases prescribed by this Act and not otherwise".

The legislation

4. Section 6(1) of the Queensland Act provides:

" A carrier shall not be liable for loss of or injury to any goods entrusted to him under a contract of carriage ... in an amount greater than twenty dollars per package or, in the case of unpackaged goods, per item of goods consigned or two hundred dollars per consignment, whichever is the less, unless, at or before the time such goods are delivered to the carrier the consignor has given to him a statement in writing declaring the nature and value of such goods and has received from the carrier his acceptance in writing of the consignment in question ..."

No written statement declaring the nature and value of the appellant's goods was given to the respondent in accordance with s.6(1) of the Queensland Act nor was the respondent's acceptance of any increase in risk obtained pursuant to that section. In consequence, if s.6(1) was
applicable to the contract of carriage, the liability of the respondent was in the circumstances limited to $200. Section 9(1) of the Queensland Act deems to be incorporated in every contract of carriage the provisions of s.6(1) ((3) See Penn Elastic Co. Pty. Ltd. v. Sadleirs Transport Co. (Vic.) Pty. Ltd. (1976) 136 CLR 28.). Section 9(2) makes void any contract purporting to exclude, modify, alter or avoid any provision of the Act.

5. The appellant argued that the limitation imposed by s.6(1) was inapplicable by reason of ss.68 and 74 of the Trade Practices Act. Each of those sections is found in Pt V, Div.2 of that Act which is entitled "Conditions and Warranties in Consumer Transactions". Those provisions relevantly provide:

" 68(1) Any term of a contract ... that purports to exclude, restrict or modify or has the effect of excluding, restricting or modifying: (a) the application of all or any of the provisions of this Division;

(b) the exercise of a right conferred by such a provision;

(c) any liability of the corporation for breach of a condition or warranty implied by such a provision; or

(d) the application of section 75A; is void." " 74(1) In every contract for the supply by a corporation in the course of a business of services to a consumer there is an implied warranty that the services will be rendered with due care and skill and that any materials supplied in connexion with those services will be reasonably fit for the purpose for which they are supplied."

The Court of Appeal

6. The Court of Appeal, allowing an appeal from the decision of Cooper J, held that s.6 of the Queensland Act was effective to limit the respondent's liability and was not inconsistent with either s.68 or s.74 of the Trade Practices Act. These conclusions assume that the cause of action to be brought by the appellant would be based on the statutory warranty implied by s.74. The Court reached its conclusions
essentially because any limitation resulting from s.6 of the Queensland Act "flows from the operation of that independent statutory provision and not from any contractual term express or implied". In the view of the Court, s.9 was no more than "a supplementary statement whose purpose is to ensure, perhaps out of over-caution, that the limitation will have contractual standing as one aspect of the statutory scheme which prohibits contracting out: cf. s.9(2)".

The appellant's argument

7. Before this Court the appellant did not press any argument as to the operation of s.9 of the Queensland Act, preferring to base his case squarely on the scope of s.74 of the Trade Practices Act. The essence of the submission was that the statutory creation of a contractual obligation is inherently accompanied by a full contractual remedy. Section 74, it was submitted, implies into relevant contracts a term which contains the primary obligation to take due care and skill and a secondary obligation to provide compensation for breach.

8. In support of this submission, the appellant pointed to s.68(1)(c) which renders void any term of a contract that purports to modify a warranty imposed by, among other provisions, s.74. This provision was said to demonstrate the Trade Practices Act's concern with liability as well as the creation of rights. Such a provision was not necessary to override State legislation "because section 109 does that work". The appellant pointed also to ss.73 and 74B which deem a contractual liability to exist for breach of an implied warranty in the case of certain persons with whom the consumer does not have a direct contractual relationship. These submissions have force. It would indeed be extraordinary if non-contractual parties had greater rights to recovery than did a consumer who is party to a contract in relation to which s.74 operates.

9. It follows that the warranty created by s.74 carries with it full contractual liability for breach. Section 6(1) of the Queensland Act purports to limit that liability. The consequence is that there is a conflict between the two statutes, a conflict which amounts to a direct inconsistency in the sense that the Queensland Act detracts from the full operation of a right granted by the Trade Practices Act ((4) Clyde Engineering Co. Ltd. v. Cowburn (1926) 37 CLR 466 at 478 per Knox CJ and Gavan Duffy J; Victoria v. The Commonwealth
(1937) 58 CLR 618 at 630 per Dixon J; Ansett Transport Industries (Operations) Pty. Ltd. v. Wardley (1980) 142 CLR 237 at 259-260 per Mason J). The limitation is therefore, to that extent, invalid by reason of s.109 of the Constitution. It is unnecessary to consider whether, as a separate head of inconsistency, ss.68 and 74 purport to "cover the field", that is whether they "evince an intention on the part of the statute to make exhaustive or exclusive provision on the subject with which (they deal), thereby bringing s.109 into play" ((5) The Queen v. Credit Tribunal; Ex parte General Motors Acceptance Corporation (1977) 137 CLR 545 at 563 per Mason J).

10. However, the respondent referred to s.75(3) of the Trade Practices Act which, it submitted, saved the operation of s.6 of the Queensland Act. That section is in Pt V, Div.3, which is entitled "Miscellaneous", and reads:

" Except as expressly provided by this Part, nothing in this Part shall be taken to limit, restrict or otherwise affect any right or remedy a person would have had if this Part had not been enacted."

11. The argument that s.6(1) constitutes a "right or remedy" within s.75(3) requires a contrived construction of the provision which, in our view, goes against the evident consumer protection purposes of the Trade Practices Act. In any event, s.75(3) cannot resolve a direct inconsistency attracting the operation of s.109 of the Constitution.

12. This conclusion is sufficient to dispose of the inconsistency issue but it is desirable to say something about one other matter which was not pressed at the hearing but which arises from the judgment of the Court of Appeal and from the authorities. Some comment on this matter is called for to avoid any misunderstanding as to the scope of this judgment or the implications to be drawn from it.

Section 9 of the Queensland Act

13. Although the Court of Appeal held that s.9 was merely a supplementary provision, it would have been open to the appellant to contest that view. In Grace Bros Pty. Ltd. v. Rice ((6) (1981) 71 FLR 129.), McCracken DCJ considered the relationship between ss.6 and 9 of the Queensland Act and ss.68 and 74 of the Trade Practices Act. His Honour held that s.9 incorporated s.6(1) into each relevant contract so as to constitute a term of that contract within the
meaning of "any term of the contract" in s.68 of the Trade Practices Act. In support of this position, his Honour referred to the comments of Stephen J as to the operation of s.6 in Penn Elastic Co. Pty. Ltd. v. Sadleirs Transport Co. (Vic.) Pty. Ltd. ((7) (1976) 136 CLR 28 at 31.):

"(T)he limit of liability attaches to each contract of carriage; it becomes a term of that contract".

14. Three results follow. Because s.6 is a term of relevant contracts of carriage, that term is rendered void in each case by the operation of s.68(1)(c). Further, s.9 itself is impugned in that it purports to imply into contracts exactly those terms that s.68 forbids. It can therefore be seen as inconsistent with s.68 for the purposes of s.109 of the Constitution. It is also the case that s.5 of the Queensland Act, which provides that the liability of a carrier shall be upon "the bases prescribed by this Act and not otherwise", is invalid under s.109 of the Constitution to the extent that it purports to preclude the operation of ss.68 and 74 of the Trade Practices Act. However, the question is not thereby resolved. The finding of the Court of Appeal was that s.6 has an independent declaratory operation not dependent on s.9 and this issue is still open.

15. The position in the case of provisions such as s.74 of the Trade Practices Act which provide for the implication of contractual terms is less problematic. In Arturi v. Zupps Motors ((8) (1980) 33 ALR 243 at 246; see also Polgardy v. AGC Ltd. (1981) 34 ALR 391; Zaravinos v. Dairy Farmers Co-op. Ltd. (1985) 7 FCR 195, 59 ALR 603;
Hjertum v. Ahern (1987) 9 ATPR 40-823.) Brennan J, speaking of s.71 of the Trade Practices Act, said that the section:

"takes effect by imposing an obligation upon one of the contracting parties as though the parties had embodied the obligation in their contract. No doubt it is right to say that the obligation is statutorily created ... But by describing the obligation as an implied condition, s.71 defines the nature of the obligation. It is an obligation which takes effect by a legal fiction, namely, that the parties had made a contract which included the obligation ... (A) breach of the obligation is not to be treated as a breach of an obligation imposed upon the obligor by the Act dehors the contract, but as an obligation imposed by the contract itself".

But where, as here, the term appears in one section of that Act and the incorporating provision in another, it is not clear whether they operate together only or whether each has independent standing. Because of the way in which the appeal was conducted this issue does not arise for decision. Nonetheless it may well be that to divorce s.6(1) from the operation of ss.5 and 9 in the context of an Act designed to regulate contracts of carriage (including contracts with consumers) would be to prefer form over substance in a way that undermines the operation of the Trade Practices Act.

Section 74(3) of the Trade Practices Act

16. On what has been said thus far in this judgment the appeal should be allowed. However, the respondent contended, in addition, that the contract of carriage fell within s.74(3) of the Trade Practices Act so that the warranty implied by s.74(1) was not applicable. Because of the view it took of inconsistency, it was unnecessary for the Court of Appeal to deal with this argument. However, it was rejected by
Cooper J

17. Section 74(3) provides that a reference in s.74 to services does not include a reference to services that are, or are to be, provided, granted or conferred under:

"(a) a contract for or in relation to the transportation or storage of goods for the purposes of a business, trade, profession or occupation carried on or engaged in by the person for whom the goods are transported or stored".

18. In the respondent's submission, the words "person for whom the goods are transported" are apt to describe both the appellant and the Commissioner of Police. That much may be accepted. The real question in this regard is whether the transportation of the goods was for the purposes of an occupation carried on by either of those persons.

19. Section 74(3) must be read within the context of the Trade Practices Act as a whole and within Pt V "Consumer Protection" in particular ((9) See Ross v. The Queen (1979) 141 CLR 432 at 440; K. and S. Lake City Freighters Pty. Ltd. v. Gordon and Gotch Ltd. (1985) 157 CLR 309 at 312; Re Media, Entertainment and Arts Alliance; Ex parte Hoyts Corporation Pty. Ltd. (1993) 67 ALJR 723 at 726, 115 ALR 321 at 326.). The provision excludes from protection contracts for the transport of goods for the purposes of "a business, trade, profession or occupation" and thereby restricts its operation to persons acquiring services in a non-commercial capacity. Section 4B(1)(b) defines a consumer of services to be a person who acquires services for less than $40,000 ((10) Prescribed by s.4B(2).) or "of a kind ordinarily acquired for personal, domestic or household use or consumption". In conjunction with this definition, the effect of s.74(3) is to further restrict the scope of the term to exclude those services acquired for a commercial purpose for less than $40,000. In the area of transportation and storage of goods, many contracts for commercial services would otherwise fall under the $40,000 limit and therefore be subject to the warranty implied by s.74. The services provided by a courier are an obvious example. The exclusion from protection of these commercial services accords with the scheme of the Act but the converse would be true if s.74(3) extended to deny protection in the case of personal, domestic and household services such as those provided in this case.

20. A similar expression to that in s.74(3), "for the purpose of a trade, business or profession" as it appears in s.6 of the Contracts Review Act 1980 (N.S.W.), was considered in Ellison v. Vukicevic ((11) (1986) 7 NSWLR 104 at 111.) where Young J adopted the view of Lee J in Collins v. Parker ((12) Unreported, Supreme Court of N.S.W., 11 May 1984 at 18.) that:

"(t)he expression 'for the purpose of' has the meaning that the contract under consideration is entered into as an ordinary incident of the carrying on of a particular trade, business or profession then being carried on or proposed to be carried on."

On this approach, it is necessary to examine whether the movement of the appellant's household goods from Ayr to Dalby was an ordinary incident of his occupation as a police officer or of the position of Police Commissioner. In our view it was not.

21. As to the appellant himself, it is no doubt true that his household effects were moved in connection with his posting to another police station but it cannot be said that they were moved as an ordinary incident of his occupation as a police officer. Primarily, the carriage of goods was for personal, domestic and household purposes.

22. Equally, it cannot be said that the household effects were
carried for the purposes of the occupation carried on by the Commissioner of Police. It is stretching a long bow indeed to suggest that the Commissioner entered into the contract of carriage for the purposes of his occupation as Commissioner. He entered into the contract as part of the operation of the police force, but as a State functionary for a public purpose, not for the purposes of his own
occupation. To borrow the language of Windeyer J in Ex parte Professional Engineers' Association ((13) (1959) 107 CLR 208 at 275.) the maintenance of the police force is an "established function of government". Section 74(3) of the Trade Practices Act is therefore inapplicable.

23. The result is that the appeal must succeed. The order of the Court of Appeal should be set aside and the order of Cooper J restored to the extent that it was varied by the order of the Court of
Appeal.

McHUGH J The facts, statutory provisions and issues are set out in
the judgment of Toohey and Gaudron JJ

2. I agree with their Honours' reasons for concluding that s.6(1) of the Carriage of Goods by Land (Carriers' Liabilities) Act 1967 (Q.) is inconsistent with s.74 of the Trade Practices Act 1974 (Cth) and I agree with their Honours' comments concerning s.9 of the former Act. I also agree with their Honours' conclusion that the contract of carriage between the Commissioner of Police and the respondent did not fall within the exception in s.74(3)(a) of the Trade Practices Act. However, my reasons for reaching that conclusion are different from those of their Honours.

3. To fall within s.74(3)(a), the transportation or storage of the relevant goods must be "for the purposes of a business, trade, profession or occupation carried on or engaged in by the person for whom the goods are transported or stored". That means, I think, that the transport of the goods must be for a business, trade, professional or occupational purpose. Although the use of the passive voice creates ambiguity, the better conclusion is that the paragraph looks at the business, trade, profession or occupation of the consignor rather than that of the consignee of the goods. Thus, if a grocer sends goods to a customer, the relevant business is that of the grocer, not the customer. Goods are transported for the purposes of a business, trade, profession or occupation when they are transported to further some object of the relevant business, trade, profession or occupation.

4. In the present case, the consignor of the goods was the Commissioner of Police, and the relevant classification under s.74(3)(a) is the Commissioner's "occupation". However, the purpose of the transportation was to carry the domestic property of the appellant and his family from Ayr to Dalby for use in their new home. No doubt, by entering into the contract of carriage, the Commissioner was discharging one of the duties of his occupation. But it cannot be said that the goods were transported for any purpose of the Commissioner's occupation.

5. Accordingly, the appeal should be allowed.