Federal Court of Australia

ALDI Foods Pty Limited as General Partner of ALDI Stores (A Limited Partnership) v Transport Workers’ Union of Australia [2020] FCAFC 231

ORDERS

THE COURT ORDERS THAT:

1.    The appeal be dismissed.

2.    The appellant pay the respondent’s costs of the appeal.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

ORDERS

THE COURT ORDERS THAT:

1.    The appellant be granted an extension of time up to and including 17 June 2020 within which to file an application for leave to appeal, and leave to appeal.

2.    The appeal be allowed.

3.    The orders of the Court made on 18 May 2020 be set aside and the interlocutory application filed by the appellant on 9 April 2020 be remitted to the trial judge for reconsideration in accordance with the reasons of this Court.

4.    The respondent pay the appellant’s costs of the appeal.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

THE COURT:

A.    Introduction

1    During 2017, the Transport Workers’ Union of Australia (TWU) published certain communications relating to ALDI Foods Pty Limited as General partner of ALDI Stores (a Limited Partnership) (ALDI) in the form of media releases, hand-distributed pamphlets and flyers, a media interview and a Facebook post, and undertook certain protest actions at a number of ALDI stores and an ALDI distribution centre. The communications contained statements to the effect that ALDI’s contractual arrangements with trucking companies had resulted in truck drivers being underpaid and put under pressure, causing them to speed and drive long hours without mandatory breaks with a detrimental impact on transport safety. The protest actions concerned the same claims.

2    ALDI commenced a proceeding against the TWU alleging that its conduct constituted breaches of:

(a)    section 45D(1) of the Competition and Consumer Act 2010 (Cth) (CCA), which prohibits secondary boycott conduct;

(b)    section 18 of the Australian Consumer Law (being Schedule 2 to the CCA), which prohibits misleading and deceptive conduct;

(c)    section 31 of the Australian Consumer Law, which prohibits conduct that is liable to mislead persons seeking employment; and

(d)    the common law torts of nuisance, trespass and injurious falsehood.

3    In the proceeding, ALDI sought injunctive relief to prevent repetition of the alleged unlawful conduct and damages, including aggravated damages.

4    The trial of the proceeding commenced on 30 April 2019 and was adjourned on 8 May 2019. It resumed for a further 3 days on 22 October 2019. In its written submissions dated 23 October 2019, ALDI abandoned all claims for relief other than those founded upon:

(a)    s 18 of the Australian Consumer Law; and

(b)    the tort of injurious falsehood.

5    On 6 March 2020, the primary judge dismissed the proceeding: see ALDI Foods Pty Limited as General Partner of ALDI Stores (a Ltd Partnership) v Transport Workers' Union of Australia [2020] FCA 269; 294 IR 407 (Principal Judgment).

6    In relation to the claim under s 18 of the Australian Consumer Law, the primary judge found that the communications made by the TWU were not made in trade or commerce. That finding was sufficient to dismiss the claim and was the principal basis on which the claim was dismissed. The primary judge also found that the TWU is not a trading corporation. That finding resulted in the dismissal of the claim in respect of all communications other than those involving “the use of postal, telegraphic or telephonic services” (which activated the extended operation of the CCA under s 6(3)). Although it was unnecessary to resolve whether any of the relevant communications were misleading or deceptive or likely to mislead or deceive, his Honour concluded that the alleged representations made by the TWU in the communications, save in one respect, were likely to mislead.

7    The primary judge found that the claim for injurious falsehood failed because either ALDI had not established that the statements relied upon were malicious, and/or ALDI conceded that it had suffered no actual loss or damage by reason of the making of the statements relied upon.

8    ALDI appeals the dismissal of the claim under s 18 of the Australian Consumer Law, and specifically the conclusions that the communications made by the TWU were not made in trade or commerce and that the TWU is not a trading corporation.

9    In the Principal Judgment on 6 March 2020, the primary judge made no order with respect to the costs of the proceeding. On 9 April 2020, the TWU filed an interlocutory application seeking an order pursuant to r 39.05 of the Federal Court Rules 2011 (Cth), alternatively pursuant to the Court’s implied power, varying the order made on 6 March 2020 by ordering that ALDI pay the TWU's costs of the proceeding and the costs of the interlocutory application. It is common ground that the TWU sought recovery of its costs in respect of the abandoned claims on an indemnity basis, and its costs of the s 18 and injurious falsehood claims on the normal (party-party) basis. On 18 May 2020, the primary judge dismissed the interlocutory application, ordered ALDI to pay one-half of the TWU’s costs of the proceeding and concluded that no separate order should be made for the costs of the interlocutory application: see ALDI Foods Pty Limited as General Partner of ALDI Stores (a Limited Partnership) v Transport Workers’ Union of Australia (No 2) [2020] FCA 654 (Costs Judgment).

10    On 5 June 2020, the TWU filed a notice of appeal in respect of the Costs Judgment seeking orders that ALDI pay:

(a)    the TWU’s costs of the proceeding;

(b)    the TWU’s costs in relation to the causes of action abandoned by ALDI on 23 October 2019 on an indemnity basis; and

(c)    the TWU’s costs of the interlocutory application in respect of costs.

11    On 10 June 2020, the Court communicated with the TWU, suggesting that the TWU required leave to appeal from the Costs Judgment. The TWU filed an application for leave to appeal on 17 June 2020.

12    For the reasons explained below, we dismiss ALDI’s appeal and we uphold the TWU’s appeal.

b.    ALDI’S APPEAL

The misleading conduct

13    The primary judge summarised the allegedly misleading conduct undertaken by the TWU as follows (Principal Judgment [41]-[42]):

41    The conduct said to contain misleading or deceptive statements, or conduct which was likely to mislead or deceive, was contained within a number of media releases, pamphlets and interviews issued by the Union.

42    These statements were said by Senior Counsel for ALDI to be included within the following:

•    a media release on 16 May 2017 in which it was stated that “[t]ruck drivers and TWU supporters angry at wealthy retailer Aldi over a spike in deaths from truck crashes have blocked a road in South Freemantle”. The media release went on to state that “[t]raffic was halted on Hampton Road as over 150 protesters demanded that Aldi end the financial squeeze on transport companies and truck drivers, which is leading to deaths on our roads…”;

•    a flyer of an unknown date “found in the store by employees” titled “C’Mon Aldi. Do The Right Thing”. The flyer states that “Multi national corporations at the top of the supply chain, like Aldi, put pressure onto trucking companies and owner drivers to fulfil unsafe deadlines”. The flyer goes on to state “What can be done: Aldi needs to engage with transport workers through the TWU and take responsibility for its supply chain to ensure transport workers are not being unfairly pressured and are being properly compensated…”;

•    a flyer distributed at Regency Park on 16 August 2017 titled “Stop The Race To The Bottom”. The flyer goes on to state that “Multi national corporations at the top of the supply chain, like Aldi, put pressure onto trucking companies and owner drivers to fulfil unsafe deadlines”. The flyer goes on to further state: “What can be done: Aldi needs to engage with transport workers through the TWU and take responsibility for its supply chain to ensure transport workers are not being unfairly pressured and are being properly compensated…”;

•    a media release dated 16 August 2017 titled “Enough is enough: truckies protest Aldi’s squeeze”. The media release addresses a protest at the Regent Park store held “to ensure [that] Aldi heard their demands for a safer industry”. The text of the release states (inter alia) that “Aldi is refusing our requests to sit down and talk about the pressure they are putting transport operators and truck drivers under. They are refusing to accept that this pressure is leading to horrific deaths and injuries on our roads”. The release goes on to state that “[t]ransport workers in Aldi’s supply chain are constantly faced with pressure from above, leading to trucks not being maintained, drivers forced to speed, drive long hours and skip mandatory rest breaks ... Aldi last year attempted to pay truck drivers less than their already woefully low rate by misclassifying them in an Enterprise Agreement which, fortunately, the Federal Court struck down”;

•    an entry on a Facebook page dated 16 August 2017 which repeats the title “Enough is enough: Aldi needs to stop the squeeze… Truck drivers in SA today delivered a strong message to Aldi: stop the pressure on transport companies and drivers that is killing people…”;

•    a media release dated 24 August 2017 in which it stated that “[o]ver 500 truck drivers and their supporters have protested at an Aldi supermarket at Mt Druitt, Sydney, angry at the wealthy retailer’s refusal to ensure safety in its transport supply chain”. It goes on to state that “[t]he protest follows a Federal Court rejection on Wednesday of Aldi’s bid for an injunction to stop drivers protesting its poor safety practices and stopping them from revealing information about rates and conditions in its supply chain… Aldi must face up to the role they play in creating pressure on transport. Wealthy retailers through their low cost contracts are forcing transport companies and drivers to not maintain vehicles, drive long hours, speed and skip mandatory rest breaks. This pressure is killing people on our roads and leaving families and communities devastated…”;

•    a media release on 29 August 2017 in which it is stated that the Union has accused ALDI of (without alteration) “attacking free speech by pursing a Federal Court case to stop drivers from protesting over its unsafe practices and to restrict the union from publishing information on the rates and conditions of any transport workers in its supply chain…”. The media release goes on to state that “Aldi is trying to use bullying tactics to silence truck drivers and their supporters in highlighting the problems with safety in the Aldi supply chain…”. The statement went on to recount (without alteration) that “Aldi is separately appealing a Federal Court decision which struck down a bogus enterprise agreement voted on just two members of staff. The agreement denied minimum award rates and classified drivers of large trucks as store workers”;

•    a flyer left in a trolley after a protest held on 13 October 2017 at ALDI’s Kilburn store. The flyer is again headed “Stop the race to the bottom”. It goes on to state: “Every year hundreds of people die on our roads in truck related accidents. This is caused by big companies – like Aldi – cutting costs in their contracts. This squeeze is sweating drivers forcing us to work longer and harder with little chance to take a break or do maintenance … But transport workers won’t let this carnage continue. Coles and Woolworth’s are doing the right thing by working with transport workers through our union, the TWU, to address issues in their supply chains for everyone who carries for them”;

•    a flyer distributed at a protest at the ALDI Toombul store on 13 October 2017 again headed “Stop The Race To The Bottom” and again repeating the statement that “Every year hundreds of people die on our roads in truck related accidents. This is caused by big companies – like Aldi – cutting costs in their contracts”;

•    a flyer distributed at a protest at the ALDI Parramatta store and again headed “Stop The Race To The Bottom”. The flyer goes on to state that “Every year hundreds of people die on our roads in truck related accidents. This is caused by big companies – like Aldi – cutting costs in their contracts”;

•    an article in the Hobart Mercury (“Mercury”) published on 6 November 2017 stating (inter alia) that “protests were held only after the Federal Court rejected Aldi’s application for an injunction to force drivers from publicly highlighting its poor safety practices”. The article went on to state that “[i]t is appalling that this multinational’s solution to its own flawed attitude to safety was not to clean up the mess, but ask an Australian court to gag hardworking Australians from speaking out. Thankfully that failed”. The article went on to refer to ALDI appealing “a separate Federal Court decision which struck down a bogus enterprise agreement voted on by just two members of staff. The agreement denied minimum award rates and classified drivers of large trucks as store workers…”. That article was written by the secretary of the Victorian and Tasmanian Branch of the Union, Mr John Berger;

•    another a flyer distributed by protesters on 15 November 2017 at the Carrington store containing a statement that “hundreds of people die on our roads in truck related accidents” caused by “big companies – like Aldi – cutting costs in their contracts” such that “this squeeze is sweating drivers forcing us to work longer and harder with little chance to take a break or do maintenance…”;

•    a radio interview that took place on 28 February 2018 on 2GB, where Mr Tony Sheldon of the Union was interviewed by Mr Steve Price. In that interview, Mr Sheldon stated that “what’s particularly appalling is that ALDI does have a bad record… and they’re refusing to try to work out solutions”. He referred to ALDI’s direct hire drivers providing “sworn written statements… about excessive hours” and “when complaints are made about fatigue [drivers] are just told to go faster…”. He suggested that ALDI “squeeze[s] so much on price” and that direct hire operations contract companies “unwittingly but also unfortunately… are breaching fatigue hours, not training drivers properly… breaching very fundamental laws within Australia.”. Mr Sheldon stated that “ALDI’s certainly at the top of the list on not trying to deal with problems in their supply chain”. Towards the end of that interview, he went on to threaten “[w]e’re not going to stop. We’re going to keep pushing and I only see this escalating to more action against ALDI until they turn around and say Australian lives count”; and

•    a television interview on Channel 9 given by Mr Tony Sheldon on 15 November 2017, where he stated that “… we have trucks out there and drivers that are literally time bombs waiting to go off because of the pressure from ALDI” and that “ALDI is refusing whilst they are seeing people being slaughtered in our industry and they are doing nothing about it”.

    Each of these publications were annexed to an affidavit affirmed by Mr Viktor Jakupec dated 8 May 2018, the Managing Director of ALDI’s Regency Park Region.

43    In addition, there was also the following publication annexed to another affidavit of Mr Jakupec, namely:

•    a media release dated 13 October 2017 headed “TWU protests ALDI’s cut-rate contracts putting motorists at risk”. The media release goes on to state: “[g]lobal supermarket giant Aldi is successful because it undercuts the competition. But the cheap groceries would not be possible without Aldi’s low-cost wages… It is the hidden shame of the supermarket wars that truck drivers down Aldi’s supply chain are forced to neglect vehicle maintenance, drive longer than recommended hours, break speed and other road rules and skip mandatory meal breaks… just to make ends meet”.

14    Although the above conduct was referred to by the primary judge as a submission by Senior Counsel for ALDI, it is apparent from the remainder of the Principal Judgment that his Honour found that the conduct had been engaged in by TWU (see the specific findings at Principal Judgment [51], [56], [62], the table reproduced at [70] and the findings of misleading conduct at [90]ff).

15    The primary judge also made the following findings with respect to protest actions undertaken by the TWU at ALDI premises in support of the claims made in the above media releases, pamphlets and interviews:

(a)    On 16 May 2017, the TWU blocked traffic in Hampton Road, South Freemantle outside a building site for a new ALDI store (and issued the media release referred to above) (Principal Judgment [47]-[54]).

(b)    On 15 June 2017, nine people entered the Churchill Central Mall in Adelaide in which there was an ALDI store. About five of the people were wearing clothing with a TWU logo and about four of these people entered the ALDI store. They distributed pamphlets titled "C'mon ALDI Do the right thing" (referred to above). These pamphlets were also distributed to people entering and leaving the ALDI store and were left amongst the stock in the ALDI store (Principal Judgment [55]-[57]).

(c)    On 16 August 2017, a vehicle with a trailer attached was positioned across the driveway of ALDI’s Regency Park Distribution Centre which was used by trucks to enter and leave those premises. This caused an ALDI truck to exit the premises by means of a driveway generally only available in case of fire, causing delay. Another ALDI truck sought to do the same, but was prevented from doing so by protesters until police came and cleared the exit. Those participating in the demonstration placed under the windscreens of cars parked in the ALDI carpark a ''flyer" which bore the TWU logo and was headed "Stop the Race to the Bottom" (referred to above) (Principal Judgment [58]-[62]).

(d)    On 24 August 2017, a demonstration occurred in the car park outside the Mt Druitt ALDI store. The demonstrators were equipped with posters, flags, drums and banners with the TWU logo and hindered customers entering and leaving the store and entering and leaving the car park. Store management asked the protesters to leave but they refused. The police were called but the protesters left before the police arrived.

16    It is unnecessary to describe in detail the primary judge’s findings with respect to whether the statements contained in the above media releases, pamphlets and interviews were misleading or deceptive or likely to mislead or deceive. Overall, his Honour concluded that (at [105]):

The concerns of the Union as to public safety were real. So were the steps being taken by ALDI to address public safety concerns. On balance, it is concluded that the statements relied upon in the 1st, 3rd, 4th, 5th, 6th, 7th and 8th representations were at least "likely to mislead'' within the meaning of and for the purposes of s 18 of the Australia Consumer Law.

17    The 1st, 3rd, 4th, 5th, 6th, 7th and 8th representations (as enumerated by ALDI in its pleading) were that ALDI:

(a)    is responsible for road deaths (1st representation);

(b)    places pressure on its supply chain leading to trucks not being maintained (3rd representation);

(c)    attempted to pay truck drivers less by misclassifying them in an enterprise agreement which was struck down by the Federal Court (4th representation);

(d)    puts pressure on trucking companies and owner drivers to fulfil unsafe deadlines (5th representation);

(e)    undercuts road safety (6th representation);

(f)    maintained these proceedings for the purpose of inhibiting free speech by truck drivers (7th representation); and

(g)    places pressure on its supply chain which results in drivers engaging in unsafe practices such as speeding, driving long hours and skipping mandatory test breaks (8th representation),

(see Principal Judgment [68]).

Applicable legal principles

Overview

18    ALDI’s appeal concerns two statutory limitations to the reach of s 18 of the Australian Consumer Law. The first requirement is that the impugned conduct be in trade or commerce. The second requirement is that the impugned conduct be engaged in by a corporation (within the meaning of s 4(1) of the CCA) or that the impugned conduct satisfy one of the requirements of s 6 of the CCA.

19    For the most part, those requirements, and the applicable legal principles concerning them, were not truly in dispute between the parties. The dispute concerned the application of the legal principles to the factual circumstances. It is convenient to explain the statutory basis for those requirements, and the meaning that has been given to them, before considering the arguments advanced on the appeal.

20    The Australian Consumer Law is set out in Schedule 2 to the CCA. Section 18(1) of the Australian Consumer Law provides as follows:

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

21    Thus, an essential element of the prohibition in s 18(1) is that the conduct, alleged to be misleading or deceptive or likely to mislead or deceive, is engaged in “in trade or commerce”.

22    While s 18(1) is expressed to apply to any person, as a law of the Commonwealth the scope of the prohibition is more confined, reflecting the legislative power conferred on the Commonwealth by the Constitution. The Australian Consumer Law is given effect as a law of the Commonwealth by s 131 of the CCA (within Division 2 of Part XI). Relevantly, s 131(1) provides as follows:

Schedule 2 applies as a law of the Commonwealth to the conduct of corporations, and in relation to contraventions of Chapter 2, 3 or 4 of Schedule 2 by corporations.

Note:     Sections 5 and 6 of this Act extend the application of this Part (and therefore extend the application of the Australian Consumer Law as a law of the Commonwealth).

23    It should be noted that the Australian Consumer Law is also applied as a law of the States and Territories by force of laws enacted by those polities. That is facilitated by Part XIAA of the CCA. However, the present proceeding was not brought under the State and Territory laws and, for that reason, it is not necessary to consider the different reach of s 18 as enacted by those laws.

24    Thus, as a law of the Commonwealth, the provisions of the Australian Consumer Law are generally confined to the conduct of corporations. In the CCA, and for the purposes of the Australian Consumer Law, a corporation is defined as, amongst other things, a foreign corporation or a trading or financial corporation formed within the limits of Australia (see ss 4(1) and 130 of the CCA). Those definitions mirror the language of the corporations head of power in s 51(xx) of the Commonwealth Constitution. The High Court foreshadowed the constitutional validity of the CCA (originally named the Trade Practices Act 1974 (Cth) (TPA)) as an enactment based on the corporations head of power in Strickland v Rocla Concrete Pipes Ltd (1971) 124 CLR 468. Subsequent cases confirmed the constitutional validity: see for example Fencott v Muller (1983) 152 CLR 570.

25    However, as the note to s 131(1) indicates, the provisions of the Australian Consumer Law also apply in the circumstances set out in ss 5 and 6 of the CCA. Relevantly, the effect of s 6 is to extend the operation of many of the provisions of the CCA (including the Australian Consumer Law) so that they apply to any person (and not just to corporations as defined), but in circumstances where the law is otherwise confined in its operation such that it can be supported by another constitutional head of power. Section 6(3) is based on the head of power in s 51(v) of the Commonwealth Constitution concerning postal, telegraphic, telephonic and other like services. It provides that s 18 of the Australian Consumer Law (amongst other provisions) has the effect it would have if:

(a)    the provision was confined in its operation to engaging in conduct to the extent to which the conduct involves the use of postal, telegraphic or telephonic services or takes place in a radio or television broadcast; and

(b)    a reference in Part XI to a corporation included a reference to a person not being a corporation.

26    Thus, s 18 applies to the conduct of any person (not being a corporation as defined in s 4(1)) to the extent that (relevantly) the conduct involves the use of postal, telegraphic or telephonic services.

In trade or commerce

27    As recognised by the primary judge, the leading authority on the meaning of the phrase “in trade or commerce” in the prohibition against misleading and deceptive conduct is the High Court decision in Concrete Constructions (NSW) Pty Ltd v Nelson (1990) 169 CLR 594 (Concrete Constructions) concerning the statutory predecessor of s 18, being s 52 of the (then named) TPA. The facts of the case are summarised in the judgment of the plurality (Mason CJ, Deane, Dawson and Gaudron JJ) at 599:

The appellant ("the company") is a corporation which was, in July 1987, constructing a building in Grosvenor Square, Sydney. The respondent ("the worker") was one of the company's employees on the site. He sustained injuries when he fell to the bottom of an air-conditioning shaft while attempting to remove a grate positioned at the entry point of the shaft. He alleges that his injuries were caused by the conduct of the company's foreman who wrongly informed him that the grates at the entry points of the air-conditioning shafts were fixed by three bolts on each side and that it was safe to remove them in the manner explained by the foreman. On the worker's case, he fell down the shaft when "one of the grates gave way by reason of the fact that it was not affixed by bolts or otherwise".

28    The High Court concluded that those facts did not give rise to a cause of action under s 52 of the TPA because the statements made by the company’s foreman to the worker were not made in trade or commerce within the meaning of the section.

29    The plurality observed that the words “trade” and “commerce” in s 52 are broad terms of common knowledge (at 602):

It is well established that the words “trade” and “commerce”, when used in the context of s. 51(i) of the Constitution, are not terms of art but are terms of common knowledge of the widest import. The same may be said of those words as used in s. 52(1) of the Act. Indeed, in the light of the provisions of s. 6(2) of the Act which give an extended operation to s. 52 and which clearly use the words “trade” and “commerce” in the sense which the words bear in s. 51(i) of the Constitution, it would be difficult to maintain that those words were used in s. 52 with some different meaning. The real problem involved in the construction of s. 52 of the Act does not, however, spring from the use of the words “trade or commerce”. It arises from the requirement that the conduct to which the section refers be “in” trade or commerce. Plainly enough, what is encompassed in the plenary grant of legislative power "with respect to ... Trade and commerce" in s. 51 (i) of the Constitution is not of assistance on the question of the effect of the word "in" as part of the requirement that the conduct proscribed by s. 52(1) of the Act be "in trade or commerce".

30    Their Honours explained that the phrase could have either of two potential meanings (at 602-603, citations omitted):

The phrase “in trade or commerce” in s. 52 has a restrictive operation. It qualifies the prohibition against engaging in conduct of the specified kind. 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. If the words “in trade or commerce” in s. 52 are construed in that sense, the provisions of the section would extend, for example, to a case where the misleading or deceptive conduct was a failure by a driver to give the correct handsignal when driving a truck in the course of a corporation’s haulage business. It would also extend to a case, such as the present, where the alleged misleading or deceptive conduct consisted of the giving of inaccurate information by one employee to another in the course of carrying on the building activities of a commercial builder. Alternatively, the reference to conduct “in trade or commerce” in s. 52 can be construed as referring only to conduct which is itself an aspect or element of activities or transactions which, of their nature, bear a trading or commercial character. So construed, to borrow and adapt words used by Dixon J. in a different context in Bank of N.S.W v. The Commonwealth, the words “in trade or commerce” refer to “the central conception” of trade or commerce and not to the “immense field of activities” in which corporations may engage in the course of, or for the purposes of, carrying on some overall trading or commercial business.

31    As observed by the primary judge, the plurality resolved this choice in favour of the narrower construction (at 603-604, citations omitted):

As a matter of mere language, the arguments favouring and militating against these alternative constructions of s. 52 are fairly evenly balanced. The scope of the prohibition imposed by s. 52 is, however, governed not only by “the terms in which it is created” but by “the context in which it is found” (see Yorke v. Lucas; and, generally, Bank of N.S.W v. The Commonwealth). In that regard, it is of particular significance that the words “trade” and “commerce” have “about them a chameleon-like hue, readily adapting themselves to their surroundings” (O'Brien v. Smolonogov, quoting Federal Commissioner of Taxation v. Whitfords Beach Pty. Ltd.). Section 52(2) precludes limiting the scope of s. 52(1) by implication drawn from the contents of other provisions of Pt V. Nonetheless, when the section is read in the context provided by other features of the Act, which is “An Act relating to certain Trade Practices”, the narrower (i.e. the second) of the alternative constructions of the requirement “in trade or commerce” is the preferable one. Indeed, in the context of Pt V of the Act with its heading “Consumer Protection”, it is plain that s. 52 was not intended to extend to all conduct, regardless of its nature, in which a corporation might engage in the course of, or for the purposes of, its overall trading or commercial business. Put differently, the section was not intended to impose, by a side-wind, an overlay of Commonwealth law upon every field of legislative control into which a corporation might stray for the purposes of, or in connection with, carrying on its trading or commercial activities. What the section is concerned with is the conduct of a corporation towards persons, be they consumers or not, with whom it (or those whose interests it represents or is seeking to promote) has or may have dealings in the course of those activities or transactions which, of their nature, bear a trading or commercial character. Such conduct includes, of course, promotional activities in relation to, or for the purposes of, the supply of goods or services to actual or potential consumers, be they identified persons or merely an unidentifiable section of the public. In some areas, the dividing line between what is and what is not conduct "in trade or commerce" may be less clear and may require the identification of what imports a trading or commercial character to an activity which is not, without more, of that character.

32    The plurality illustrated the meaning of the phrase by the following examples (at 604):

The point can be illustrated by reference to the examples mentioned above. The driving of a truck for the delivery of goods to a consumer and the construction of a building for another pursuant to a building contract are, no doubt, trade or commerce in so far as the relationship between supplier and actual or potential customer or between builder and building owner is concerned. That being so, to drive a truck with a competitor's name upon it in order to mislead the customer or to conceal a defect in a building for the purpose of deceiving the building owner may well constitute misleading or deceptive conduct "in trade or commerce" for the purposes of s. 52. On the other hand, the mere driving of a truck or construction of a building is not, without more, trade or commerce and to engage in conduct in the course of those activities which is divorced from any relevant actual or potential trading or commercial relationship or dealing will not, of itself, constitute conduct "in trade or commerce" for the purposes of that section. That being so, the giving of a misleading handsignal by the driver of one of its trucks is not, in the relevant sense, conduct by a corporation "in trade or commerce". Nor, without more, is a misleading statement by one of a building company's own employees to another employee in the course of their ordinary activities. The position might well be different if the misleading statement was made in the course of, or for the purposes of, some trading or commercial dealing between the corporation and the particular employee.

33    Toohey J explained the meaning of the phrase in similar terms (at 613- 614, citations omitted):

In my view, s. 52(1) is aimed at conduct in which a corporation engages when that conduct takes place in a situation which fairly answers the description "in trade or commerce". The words "trade or commerce" are of wide import: see Re Ku-ring-gai Co-operative Building Society (No. 12) Ltd. But their focus is on commercial activity, the providing of goods and services for reward. …

…the preposition “in” clearly operates by way of limitation. The question is not whether the conduct engaged in was in connexion with trade or commerce or in relation to trade or commerce. It must have been in trade or commerce. While there are dangers in seeking for the meaning of an expression through the substitution of another, the phrase “as part of trade or commerce” does, I think, come close to what is intended.

34    The High Court’s conclusion in Concrete Constructions is applicable to s 18 of the Australian Consumer Law (the statutory successor to s 52): Murphy v Victoria [2014] VSCA 238; 289 FLR 337 at [88]-[92] (Nettle AP, Santamaria and Beach JJA). The conclusion has stood the test of time and been applied on numerous occasions.

35    In Concrete Constructions, the majority observed that conduct may be engaged in in trade or commerce if it is engaged in by a person on behalf of another person (whose interests the first person represents or is seeking to promote) and in the course of the trade or commerce of that other person: at 604 (Mason CJ, Deane, Dawson and Gaudron JJ) and 613 (Toohey J). That principle has been applied in subsequent decisions. In Tobacco Institute of Australia Limited v Australian Federation of Consumer Organisations Inc (1992) 38 FCR 1, the Full Federal Court concluded that an industry association, “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” (Hill J at 44, with whom Foster J agreed at 25, and to similar effect Sheppard J at 16). So too, in Houghton v Arms (2006) 225 CLR 553, the High Court concluded that employees of a corporation who made misleading statements to a client of the corporation in the course of providing services to the client on behalf of their employer had personally engaged in misleading conduct in trade or commerce (in contravention of the equivalent provisions of the Fair Trading Act 1999 (Vic) which imposed primary liability on persons as well as corporations).

36    The assessment of whether conduct is undertaken in trade or commerce is necessarily fact-specific. The assessment may be assisted by analogies from the decided cases, while recognising that no analogy is perfect or determinative.

Trading corporation

37    In R v Judges of the Federal Court of Australia; ex parte Western Australian National Football League (Inc) (1979) 143 CLR 190 (Adamson), a majority of the High Court (Barwick CJ, Mason, Jacobs and Murphy JJ) concluded that an incorporated (Australian Rules) football club operating as part of a professional football league was a trading corporation within the meaning of s 4(1) of the TPA. The decision established three principles concerning the meaning of the expression “trading corporation”. First, the purpose for which a body is incorporated is not determinative of whether it is a trading corporation (contrary to the majority view in R v Trade Practices Tribunal; ex parte St George County Council (1974) 130 CLR 533): at 208-209 per Barwick CJ, 232-233 per Mason J (with whom Jacobs J agreed on all issues) and 239 per Murphy J. Second, the expression is not a term of art and connotes what is commonly accepted to be trade in accordance with the ordinary meaning of that term (a commercial or business activity principally involving the supply of goods or services for reward): see at 208-209 and 211 per Barwick CJ, 233 and 235 per Mason J and 239-240 per Murphy J. Third, trading activities must be a sufficiently significant part of the corporation’s activities. The majority expressed the third principle in slightly different terms although, as observed by the majority of the High Court in State Superannuation Board v Trade Practices Commission (1982) 150 CLR 282 at 304, the differences are of emphasis only. Barwick CJ said that trading must be a substantial, and not merely peripheral, activity (at 208); Mason J said that the “trading activity of a corporation may be so slight or incidental to some other principal activity viz. religion or education in the case of a church or school, that it could not be described as a trading corporation” (at 234); Murphy J said that the trading activities must be not insubstantial (at 239).

38    In a number of cases, the Federal Court has concluded that an incorporated body which primarily undertakes non-trading activities may nevertheless be a trading corporation because its trading activities are not insignificant. For example:

(a)    In E v Australian Red Cross Society (1991) 27 FCR 310, Wilcox J concluded (at 343-344) that the Australian Red Cross Society was a trading corporation because it earned substantial income from its shop, stalls and from running courses (although his Honour concluded that the supply of blood and blood products for reward were not trading activities but were a public welfare activity engaged in pursuant to agreements with the Commonwealth and various States).

(b)    In Orion Pet Products Pty Ltd v RSPCA (Vic) (2002) 120 FCR 191 (Orion Pet Products), Weinberg J concluded (at [171]) that the RSPCA's trading activities (which included the accreditation of egg producers in return for a royalty, the hire of short-term dog kennels, the operation of pounds for stray animals, the sale of animals (which had been rescued) and animal related products, grooming and dog training, and veterinarian services) were sufficiently significant for the association to be a trading corporation. That was notwithstanding that the RSPCA was engaged in non-trading activities such as public education and political lobbying in respect of animal welfare and the employment of inspectors who investigated and prosecuted complaints of breaches of the Prevention of Cruelty to Animals Act 1986 (Vic).

(c)    In Shahid v Australasian College of Dermatologists [2007] FCA 693; 72 IPR 555, Nicholas J concluded (at [34]-[36]) that the activities of the Australasian College of Dermatologists in providing training and accreditation for medical practitioners, which were not done for reward (in that there was no payment by the hospital for the College undertaking the process of selection of trainee registrars or for the training of registrars), were not trading activities. However, the largest income and expenditure activity of the College was its annual scientific meeting and trade exhibition. The College also earned some income from its training functions (the continuing education of Fellows and, to a small extent, of persons seeking to complete the Part 1 examination). This was sufficient to constitute the College a trading corporation. The decision was overturned on appeal, but not on this issue: see (2008) 168 FCR 46 at [38]-[40] per Jessup J (with whom Branson and Stone JJ agreed).

The findings of the primary judge

39    The primary judge found that the misleading conduct of the TWU was not undertaken in trade or commerce for the following reasons (Principal Judgment [85]-[86]):

…The conduct was more properly characterised as part of an industrial campaign being pursued by the Union seeking to address what it perceived as shortcomings in the transport industry and, more specifically, shortcomings in the transport operations of ALDI: cf. NMRA v CFMMEU [2019] FCA 1491 at [134] to [138] per Griffiths J. The conduct of the Union was also, as characterised by Finn J in Canberra International Airport [2004] FCA 133 at 61, (2004) 134 FCR at 438-439, conduct being pursued in an attempt to influence outcomes as part of informing the public. As was the case in Canberra International Airport, the topic of road deaths occasioned by trucks was a matter attracting public debate. So much is evident from the extent of the media coverage given to some of the events complained of, and from the on-going publication of articles and studies.

Separate from any such characterisation of this conduct is the further conclusion that such statements were not made “in trade or commerce”, and rose no higher than statements made “in connexion with trade or commerce or in relation to trade or commerce”. The statements made were certainly made in connection with or in relation to the trade or commerce being undertaken by ALDI, that trade or commerce at least including the transport of goods from its distribution centres to it retail stores. But such a connection or relationship is not sufficient: Concrete Constructions (1990) 169 CLR at 614 per Toohey J. Nor do the statements made “of their nature, bear a trading or commercial character”: Concrete Constructions (1990) 169 CLR at 603 per Mason CJ, Deane, Dawson and Gaudron JJ. Albeit in an interlocutory judgment, and presumably without the assistance such as was provided in the present hearing, it may be noted that Perram J in Aldi Foods Pty Ltd v Transport Workers Union of Australia [2017] FCA 1004 (“ALDI v TWU”) at [26] expressed the belief that “Aldi will have difficulties in establishing that the conduct by the TWU of its campaign is an activity which is in trade or commerce”.

40    The primary judge also found that the TWU is not a trading corporation for the following reasons (Principal Judgment [79]-[80]):

… it is concluded that the Union is not a “trading corporation”. The Union is an employee organisation registered and gaining corporate status by reason of the Fair Work (Registered Organisations) Act 2009 (Cth). Such money as is received from members is, according to the Financial Controller of the Union (Ms Samantha Metcalf), “reinvested in political worker campaigns and other initiatives aimed at advancing workplace terms and conditions, safety and so on in the road transport and aviation industries.” Some Branches of the Union, such as the Queensland Branch and the New South Wales/Australian Capital Territory Branch, sell some Union merchandise. But the sales involve sums of about $1,000 or less.

On no view can it be said that the Union engages to a “substantial” extent in trade or commerce: cf. The Judges of the Federal Court (1978) 143 CLR at 208 per Barwick CJ. Such steps as may be taken by the Union to be involved in the tendering processes of a transport operator lead to no different conclusion.

Consideration of the “in trade or commerce” issue

ALDI’s submissions

41    ALDI submitted that the assessment of whether the TWU’s misleading conduct occurred in trade or commerce required consideration of contextual issues such as where and how the representations were made, the circumstances in which they were made, the TWU’s purpose in making them, and the relationship between the parties. Addressing each of those issues, ALDI submitted that:

(a)    Whilst the TWU’s campaign may have been addressed to the public at large, it was clearly targeted at ALDI customers.

(b)    The TWU had engaged in a course of conduct which was intended to exert commercial pressure upon ALDI to force it to negotiate with the TWU about its tendering practices in the transport industry.

(c)    The relationship between the TWU and ALDI is both derivative and complex. The TWU represents transport workers. ALDI employs large numbers of transport workers, some of whom are members of the TWU. Separately, ALDI further engages some transport companies to deliver its product. Some of the drivers engaged by the transport companies may be members of the TWU. The only direct relationship between the TWU and ALDI is in respect of the transport workers employed by ALDI. That relationship will be regulated by the provisions of the Fair Work Act 2009 (Cth). While ALDI concedes that the relationship between ALDI and its employed drivers as to their conditions of employment would be in relation to (rather than in) trade and commerce, ALDI submitted that contractual arrangements between ALDI and its suppliers, whether they be suppliers of goods, themselves utilising transport services, or suppliers of transport services, is in trade or commerce.

(d)    In the circumstances of this case, the TWU’s conduct and activities went well beyond the representation of workers in an industrial campaign. The TWU’s conduct was directed towards persons whose activities bore a trading or commercial nature – it was directed towards ALDI’s customers or prospective customers, and other persons who were engaged, or sought to be engaged, in their own trade or commerce and in ALDI’s trade or commerce.

42    It was difficult to discern from those submissions what was said to be the trade or commerce in which the TWU’s misleading conduct was engaged. In its written reply and oral submissions, however, ALDI focussed and clarified its submission to contend that the relevant trade or commerce was ALDI’s trade with its customers. ALDI submitted that the impugned conduct was directed not at the general public but at a much narrower subset – at ALDI and its customers. In oral argument, ALDI submitted that:

Now, the Australian Consumer Law is, unsurprisingly, concerned with consumer protection. There is no warrant in that legislation to conclude that consumers can be lawfully misled in relation to their proposed acquisition of goods or services if a representation concerned itself with an industrial or political campaign. If the representation to the consumer is not intended to affect their proposed acquisition then it is unlikely to be in trade and commerce. If it is intended to affect their proposed acquisition of goods or services then it is likely to be in trade and commerce.

43    ALDI argued that the TWU’s conduct was in trade or commerce because it was intended to discourage consumers from shopping at ALDI. ALDI advanced the contention that if a person makes a statement that is intended to affect consumers in whether or not they will purchase particular products, then the person has engaged in conduct in trade and commerce by the making of the statement (regardless of whether the person is a supplier of the same or similar products).

The TWU’s submissions

44    The TWU submitted that the publications the subject of complaint were part of an industrial campaign which had been conducted by the TWU for many years to improve safety and fairness in the road transport industry. The campaign included political lobbying, agitation for legislative change and interaction with transport companies and retailers. An aspect of the campaign was directed at the link between pressures imposed by large clients in the transport supply chain, such as retailers, and the impact on safety.

45    The TWU submitted that the substance of the impugned communications was overtly industrial and political in substance and purpose. The conduct had no trading or commercial character and was not directed at any person with whom the TWU had or potentially had any trading or commercial relationship. The media releases and Facebook posts were directed at the public generally and aimed to move public sentiment to support the cause of safety and fairness in road transport. The TWU was not alleged to, nor does it have, any trading or commercial relationship with members of the public or ALDI customers to whom the media releases or flyers were disseminated and nor does it have any trading or commercial relationship with ALDI. Put simply, the TWU argued that representations made by a trade union criticising the business or business operations of a commercial enterprise, as part of an industrial campaign to advance its members’ interests and advocate with respect to an issue of public concern, is not a trading or commercial activity.

46    Further, the TWU argued that none of the impugned communications called for consumers to boycott ALDI. But even if it had called for a boycott, that would not have been conduct in trade or commerce having regard to the industrial and political context of the communications.

Consideration

47    We reject the primary contention advanced by ALDI that the TWU’s conduct was in trade or commerce because it was intended to discourage consumers from shopping at ALDI. We do so both as a matter of fact and as a matter of legal principle. The contention is not supported by the factual findings of the primary judge. Nor is the contention supported, as a matter of legal principle, by the reasons of the majority in Concrete Constructions, or any subsequent authority.

48    Plainly, the TWU is not engaged in the grocery trade, and does not represent any person engaged in the grocery trade. It is registered as an employee organisation under the Fair Work (Registered Organisations) Act 2009 (Cth) (RO Act) (Principal Judgment [79]). Its objects, discussed further below in connection with the “trading corporation” issue, are (amongst others) to promote, foster and maintain the best industrial interests of all members. As found by the primary judge, it has long campaigned for action in respect to its concerns about safety and fairness in the road transport industry (Principal Judgment [1]). The subject of the communications found to be misleading concerned pay and conditions in the road transport industry, being matters directly related to the industrial interests of its members.

49    As found by the primary judge, the purpose of the TWU’s campaign against ALDI, comprising the various communications found to be misleading and the protest actions, was to put pressure on ALDI to negotiate with or to discuss issues with the union (Principal Judgment [51]). The conduct was part of an industrial campaign being pursued by the TWU seeking to address what it perceived as shortcomings in the transport industry and, more specifically, shortcomings in the transport operations of ALDI (Principal Judgment [85]). The misleading conduct (in conjunction with the protest actions) was directed to the public in an attempt to influence the outcomes being sought by the TWU (Principal Judgment [85]). Furthermore, the primary judge found that the TWU’s concern in respect of the transport industry was genuine and understandable having regard to road fatality statistics and the manner in which ALDI was projecting its business model to the public (Principal Judgment [93]-[94]).

50    We agree with the conclusion of the primary judge that, while the TWU’s misleading communications may be characterised as having been made in connection with the trade or commerce being undertaken by ALDI, the communications were not made in trade or commerce within the meaning of the Australian Consumer Law (Principal Judgment [86]). In that regard, we note that the primary judge found that the communications were made in connection with that part of ALDI’s trade or commerce that comprised the transport of goods from its distribution centres to its stores. The primary judge did not find that the TWU’s communications were made in connection with ALDI’s retail sale of grocery products to its customers. In our view, that is understandable. Many of the communications were directed to the public generally, not ALDI customers specifically. The communications included media releases, media interviews and a Facebook post. Certain of the communications were pamphlets or flyers hand-distributed at ALDI stores in conjunction with protest actions. While such communications were plainly directed to ALDI customers, the communications did not call for a consumer boycott of ALDI stores. Rather, the communications made (misleading) claims about ALDI’s commercial arrangements with transport companies and the impact on transport workers. It can be accepted that the purpose of directing communications to ALDI’s customers was to put pressure on ALDI. It can be inferred that ALDI values its corporate reputation and any damage to its corporate reputation in the eyes of its customers is likely to have a detrimental impact on its grocery business. However, we would not take the step of concluding that a substantial purpose or intention of the TWU was to affect ALDI’s trade with its customers. On the unchallenged findings made by the primary judge, the substantial purpose and intention of the TWU was to put pressure on ALDI to negotiate with or to discuss issues with the union.

51    Further, as a matter of legal principle, we reject the contention that conduct is to be characterised as “in trade or commerce” within the meaning of the Australian Consumer Law merely because it is intended to affect consumers in whether or not they will purchase particular products. In our view, that contention is contrary to the reasoning of the majority in Concrete Constructions. The plurality (Mason CJ, Deane, Dawson and Gaudron JJ) adopted the narrower construction of the phrase 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” (at 603) and stated that “the section is concerned with … the conduct of a corporation towards persons, be they consumers or not, with whom it (or those whose interests it represents or is seeking to promote) has or may have dealings in the course of those activities or transactions which, of their nature, bear a trading or commercial character” (at 604). Toohey J expressed the same view, stating that the phrase “as part of trade or commerce” comes close to the intended meaning (at 614).

52    A number of cases have considered whether representations in the nature of political, social or consumer advocacy are made in trade or commerce. If the advocacy is political or educational in nature and the advocate, or those whose interests the advocate represents, are not themselves involved in trade or commerce, the representations are unlikely to be “in trade or commerce”: see for example Tobacco Institute of Australia v Woodward (1993) 32 NSWLR 559 (Tobacco Institute); Orion Pet Products at [192]-[193] (Weinberg J). Even if a corporation that is engaged in trade or commerce engages in political and public advocacy relating to regulations that may affect its business, the advocacy may not constitute conduct in trade or commerce: Village Building Co Ltd v Canberra International Airport Pty Ltd (2004) 139 FCR 330 at [51]–[59] (French, Sackville and Conti JJ).

53    Misleading conduct may affect, and may be intended to affect, the choices of consumers as to the products they purchase and the places they purchase from. However, that circumstance alone does not support a finding that the misleading conduct is in trade or commerce. The misleading conduct certainly relates to trade or commerce. But the conduct will not be in trade or commerce unless in some relevant way the conduct can be said to be an activity that bears a trading or commercial character. Mere advocacy of a social, industrial or political cause is not such an activity. There are many examples of this principle in the decided cases. Statements made by a director of the Cancer Council of New South Wales and a consultant to various anti-smoking groups concerning the dangers of passive smoking were not made in trade or commerce, notwithstanding they were intended to reduce the trade of tobacco companies: Tobacco Institute at 572-3 (Bryson J). Similarly, statements by the President of the RSPCA claiming that electronic dog collars were harmful to dogs were not made in trade or commerce because they were made as part of the RSPCA’s educational and political objectives: Orion Pet Products at [192] (Weinberg J). Conversely, statements made by a trader, disparaging the business or products of a competitor, is conduct in trade or commerce notwithstanding the statements are made on the trader’s personal Facebook page or personal blog: Madden v Seafolly Pty Ltd [2014] FCAFC 30; 313 ALR 1 at [9] (Marshall J) and [97]-[98] (Rares and Robertson JJ); Fletcher v Nextra Australia Pty Ltd (2015) 229 FCR 153 at [56]-[57] (Middleton, McKerracher and Davies JJ).

54    As the majority in Concrete Constructions noted, the dividing line between what is and what is not conduct in trade or commerce may sometimes be unclear. However, in our view this is a clear case. It has many similarities with the decision of Griffiths J in National Roads & Motorists’ Association Ltd v Construction, Forestry, Maritime, Mining and Energy Union [2019] FCA 1491; 291 IR 28 (NRMA). That proceeding arose in the context of a lengthy industrial dispute between the parties relating to the wages and conditions of employees of the My Fast Ferry business, which was operated by a wholly-owned subsidiary of the National Roads & Motorists’ Association Ltd (NRMA), Noorton Pty Ltd. The NRMA brought proceedings against the Construction, Forestry, Maritime, Mining and Energy Union (CFMMEU) alleging that various statements made by the CFMMEU (through its Maritime Union of Australia (MUA) division), in materials distributed during the industrial campaign, were misleading or deceptive in contravention of s 18 of the Australian Consumer Law. Griffiths J described the context of the alleged misleading statements as follows (at [138]):

The conduct and representations the subject of complaint by the NRMA are, on their face and in their proper context, part of an industrial and incidental political campaign … aimed at securing permanent employment, achieving wage outcomes consistent with industry rates and recouping underpayments for employees. The conduct complained of has no trading or commercial character and is not directed at any person with whom the MUA has, or potentially has, any trading or commercial relationship.

55    Griffiths J concluded that the allegedly misleading statements of the CFMMEU were not made in trade or commerce. In that regard, his Honour found (at [140]-[141]):

The MUA is not a commercial business and is not engaged in trading activities in representing its members. The Rules of the CFMMEU set out the objects of the union which concentrate on regulating and protecting the wages and conditions of members, regulating the relations between members and employers and fostering the best interests of members.

It is not sufficient that some or even most of the communications relate to or concern the business of the NRMA or Noorton. The conduct must itself be undertaken in trade or commerce and have a trading or commercial character.

56    After observing that it is important to apply the relevant principles with close attention to the facts and circumstances of the particular case, his Honour stated that the following six matters were particularly important to his conclusion (at [150]):

(a)     there was no commercial or trading relationship between the NRMA and the MUA;

(b)     the MUA’s conduct occurred in the course of an industrial campaign which was directed to securing improved terms and conditions of employment for MFF staff;

(c)     the conduct complained of was not motivated by a desire on the part of the MUA to promote any of its business activities but, as has been emphasised, was designed to secure improved working conditions;

(d)     although the MUA’s conduct in conjunction with the NRMA AGM was plainly directed at NRMA members and other persons who were attending that meeting, I do not consider that the conduct was undertaken with a view to discouraging NRMA members from maintaining their membership. The MUA clearly wanted to enlist the support of NRMA members in their industrial dispute but that is a common feature of any industrial campaign targeting a particular trading or commercial body;

(e)     similarly, any such industrial campaign is likely also to be directed to a wider section of the public, not confined to the target company itself, in order to garner public support for the campaign; and

(f)    none of conduct said to give rise to the representations pleaded by the NRMA was primarily directed to encouraging or discouraging members of the public, or members of the NRMA from investing in the NRMA’s businesses or providing patronage to its businesses. Rather, the underlying conduct was directed to garnering support from the public and members of the NRMA for the MUA’s industrial campaign for better wages and working conditions for the MFF workers (such as the emails to Mr Lund referred to at [11] above). In this regard, it is worth noting expressly that Mr Keating’s calls to boycott NRMA services (see above at [72]) were not relied on as founding any of the NRMA’s misleading or deceptive conduct claims.

57    We agree with the observation of Griffiths J in NRMA that “representations made by a trade union in the context of an industrial campaign in relation to the existing conditions of employment of employees will generally fall outside conduct that is ‘in trade or commerce’” (at [135]). For similar reasons expressed in NRMA, we consider that the TWU’s misleading conduct was not engaged in in trade or commerce. The principal factors relevant to the conclusion are that: the conduct occurred in the course of an industrial campaign which was directed to securing improved terms and conditions for TWU’s members; the TWU’s communications were directed to the public generally and not specifically directed to ALDI’s customers; even to the extent that the TWU’s communications were directed to ALDI’s customers, there was no commercial or trading relationship between the TWU and ALDI’s customers and the TWU was not involved in the grocery trade.

Consideration of the “trading corporation” issue

ALDI’s submissions

58    ALDI accepted that the principal activities of the TWU are to undertake advocacy and lobbying to advance the industrial interests of its members through improved wages and conditions. That is reflected in the TWU’s objects and is reflective of the very concept of a trade union.

59    ALDI submitted that the fact that the principal activities undertaken by the TWU are not engaged in for reward and do not yield a profit does not prevent a conclusion that they are nonetheless trading activities. ALDI submitted that members join the union with a view to enjoying the contingent benefit of representation and the fact that there is no direct correlation between membership dues and the cost of representation does not deny the commercial relationship.

TWU’s submissions

60    The TWU submitted that it is an employee organisation registered under the RO Act. To be registered, an employee organisation must be a genuine association for furthering or protecting the interests of its members (ss 18(b), 18B and 19(1) of the RO Act). A person who is eligible for membership is entitled to be admitted as a member “subject to payment of any amount properly payable” (s 166(1) of the RO Act). A union must be subject to democratic control by its members through elections (see Chapter 7 of the RO Act). Members pay dues to become part of the union, not as part of a commercial transaction for the provision of lobbying services. The objects of the union, set out in its Rules, involve promoting and securing improved conditions for members.

61    The TWU submitted that trading activities are activities of a commercial nature involving the exchange of goods and services for profit or reward. It submitted that its core activities, advocating on behalf of its members, are not trading activities and that ALDI had not suggested that the TWU undertakes any other substantial activity that might be characterised as trading.

Consideration

62    Again, we reject the primary contention advanced by ALDI that the core activities of the TWU, seeking to advance the industrial interests of its members, is a trading or commercial activity such that the TWU is a trading corporation. As stated by the majority in Adamson, the expression “trading corporation” is not a term of art and connotes what is commonly accepted to be trade in accordance with the ordinary meaning of that term. It is a commercial or business activity principally involving the supply of goods or services for reward. We consider that there is a clear distinction between activities which constitute industrial or political (in the broad sense) advocacy by a body on behalf of its members and activities that are trading or commercial.

63    The objects of the TWU, stated in clauses 2(1) and (2) of its Rules, are as follows:

(1)     The general objects of the Union are:

(a)     to uphold the principle of the combination of labour;

(b)     to promote, foster and maintain industrial organization of all workers; and

(c)     to promote, foster and maintain the best industrial interests of all Members.

(2)     Without limiting sub-rule (1), the specific objects of the Union are:

(a)     to secure for Members improved conditions of employment;

(b)     to secure for Members preference in their employment;

(c)     to obtain for Members a greater share of the product of their labour;

(d)     to afford assistance in cases of industrial oppression;

(e)     to seek to improve the status, training and educational qualifications of Members;

(f)     to promote and encourage respect within the Union and amongst Members for the dignity and worth of the human person and in the equal rights of men and women;

(g)     to promote and encourage the participation in the Union of all without distinction as to race, sex, language, or religion;

(h)     to ensure Members are provided with a safe and healthy work environment;

(i)     to assist Members in obtaining compensation for injuries sustained in the course of their employment;

(j)     to assist in obtaining compensation for dependents of Members killed in the course of a Member's employment; .

(k)     to establish and maintain a superannuation fund for Members;

(1)     to assist Members financially in cases of accident, sickness, death, distress or unemployment; and

(m)     to provide services to assist Members to obtain their own homes.

64    No evidence was adduced by ALDI to show that the TWU undertook any material activities beyond those stated in clause 2 of its Rules. The primary judge found that, while some branches of the TWU sold some union merchandise, the sales involved sums of about $1,000 or less (Principal Judgement [79]).

65    In our view, the fact that members of the TWU pay membership fees does not convert the TWU’s core activities (industrial advocacy) into a commercial or business activity. The advocacy activities of a union cannot be characterised as the supply of a service (advocacy) for reward (membership fees) in a trading or commercial sense because the service (advocacy) lacks a defined content. Such advocacy is incapable of being conceived in a contractual framework which is the foundation and touchstone of trading and commercial activity. That is because the advocacy must respond to the industrial landscape across numerous businesses which inevitably are subject to constant change. The focus and priorities of the union must respond to those changes. Furthermore, the TWU is subject to democratic control by its members, which means that the focus and priorities of the union will also respond to the governance and direction given by members from time to time. In that context, the description of a service for reward is inapt. That is not to suggest that a union is incapable of conducting a commercial or business activity; for example, a union may provide training or similar services for reward. Our conclusion is limited to the contention advanced by ALDI that the primary activities of the TWU, industrial advocacy, are a commercial or business activity.

Conclusion on ALDI’s appeal

66    In conclusion, we reject each of ALDI’s grounds of appeal and dismiss the appeal with costs.

C.    TWU’S APPLICATION FOR LEAVE TO APPEAL AND APPEAL

Does the TWU require leave to appeal?

67    As noted above, on 5 June 2020 the TWU filed a notice of appeal in respect of the Costs Judgment (which was made on 18 May 2020). Following a communication from the Court that leave to appeal may be required, on 17 June 2020 the TWU filed an application for leave to appeal.

68    Section 24(1A) of the Federal Court of Australia Act 1976 (Cth) (FCA Act) provides that an appeal from an interlocutory order of the Court cannot be brought unless the Court gives leave. Rule 35.13 of the Federal Court Rules 2011 (Cth) provides that an application for leave must be made within 14 days after the judgment concerned.

69    The prevailing view has been that a costs order, even when made as part of the final disposition of a proceeding, is interlocutory in nature: see Merit Protection Commissioner v Nonnenmacher (1999) 86 FCR 112 at [20] (Beaumont, Lee and Dowsett JJ); Rickus v Motor Trades Association of Australia Superannuation Fund Pty Ltd [2010] FCAFC 16; 265 ALR 112 at [101] (Jacobson, Siopis and Foster JJ). An order or judgment is final when it finally determines the substantive rights of the parties, although the distinction between final and interlocutory orders can be the subject of considerable debate: see, for example, Hall v Nominal Defendant (1966) 117 CLR 423.

70    More recently, two Full Federal Courts have expressed the view that a costs order at the conclusion of a proceeding is a final order made in the exercise of the jurisdiction under s 43 of the FCA Act: Probiotec Ltd v University of Melbourne (2008) 166 FCR 30 at [79] (Rares J, with whom Finn and Besanko JJ agreed), referred to with apparent approval in Les Laboratoires Servier v Apotex Pty Ltd (2016) 247 FCR 61 (Apotex) at [291] (Bennett, Besanko and Beach JJ).

71    Neither party addressed the question whether leave to appeal was required. For the reasons expressed below, we would in any event grant the TWU an extension of time for the filing of its application for leave to appeal, and leave to appeal, and it is therefore unnecessary and would be inappropriate for us to express any concluded view on the question.

Extension of time and leave to appeal

72    Assuming the costs order made by the primary judge in the Costs Judgment was interlocutory in nature, the TWU ought to have filed an application for leave to appeal within 14 days, being 1 June 2020. It filed its notice of appeal (rather than an application for leave to appeal) on 5 June 2020. Following a communication from the Court, the TWU filed an application for leave to appeal on 17 June 2020.

73    The Court has power to extend the time for filing an application for leave to appeal under r 35.14 of the Federal Court Rules 2011 (Cth). The reason for the TWU’s late filing was explained in an affidavit of Nicholas McIntosh, the National Assistant Secretary of the TWU, sworn 16 June 2020. In short, Mr McIntosh believed that the TWU could appeal the Costs Judgment as of right and had 28 days in which to file a notice of appeal. We accept that explanation. As it turns out, the TWU filed a notice of appeal 4 days after the expiry of the 14-day period, but within the 28-day period allowed for an appeal. It then filed an application for leave to appeal a short time later after becoming aware that the application may be required. The delay was not lengthy and no prejudice has been caused to ALDI. Accordingly, we grant an extension of time.

74    The principles concerning applications for leave to appeal are well known. Generally, the applicant for leave must demonstrate that the decision is attended with sufficient doubt to warrant it being reconsidered by the Full Court and that substantial injustice would result if leave were refused, supposing the decision to be wrong: Decor Corporation Pty Ltd v Dart Industries Inc (1991) 33 FCR 397 at 398–9. The proceeding below was substantial and we infer that substantial costs will have been incurred on both sides. It follows that there is a prospect that substantial injustice would result if leave were refused and the costs decision were wrong. For the reasons explained below, we have come to the view that the primary judge’s decision was based on errors of principle. We therefore grant leave to appeal.

The reasoning of the primary judge

75    The arguments advanced by the parties necessitate a careful consideration of the reasoning of the primary judge. It is necessary to set out the steps in that reasoning.

76    The primary judge commenced his consideration of costs by summarising the outcome of the proceeding:

(a)    until the penultimate day of the hearing in October 2019, ALDI maintained six causes of action against the TWU arising out of the events described earlier in these reasons;

(b)    during closing submissions, ALDI abandoned all causes of action other than those founded on s 18 of the Australian Consumer Law and injurious falsehood;

(c)    ALDI failed on both of those causes of action, although it succeeded in establishing that 7 out of 8 of the alleged representations made by the TWU were likely to mislead within the meaning of s 18,

(Costs Judgment [2] and [3]).

77    The primary judge recorded that the TWU sought costs on an indemnity basis in respect of the abandoned causes of actions and otherwise sought its costs on the normal basis in respect of the remaining two causes of action on which it succeeded (Costs Judgment [4]). His Honour then recorded his overall conclusion that ALDI should pay one half of the TWU’s costs and that there should be no order that any costs be paid on an indemnity basis (Costs Judgment [5]). In providing reasons for that conclusion, his Honour first addressed the claims that were maintained (although his Honour only refers to the s 18 claim, we infer that his Honour also had in mind the injurious falsehood claim), and then addressed the abandoned claims.

78    In relation to the claims that were maintained, and specifically the s 18 claim, his Honour found that the bulk of the evidence, hearing time and submissions focussed upon whether the representations relied upon were misleading or deceptive (on which the TWU failed). Conversely, the basis upon which the TWU prevailed, that the misleading communications were not made in trade or commerce, occupied comparatively little hearing time (Costs Judgment [6]). His Honour then referred to the principles governing the award of costs, including that: the Court has a wide discretion, but that it must be exercised judicially and not arbitrarily or capriciously; as a general rule, costs follow the event; however, the general rule is qualified by the undoubted power of the Court to apportion costs taking into account the outcome on particular issues (Costs Judgment [9]-[10]).

79    His Honour concluded that the “appropriate order to be made in respect to those costs incurred in respect to the issues resolved is that ALDI should be ordered to pay one-half of the Union’s costs” (Costs Judgment [14]). In context, it is clear that his Honour’s reference to “the issues resolved” is a reference to the s 18 and injurious falsehood claims. His Honour explains the reasons for that order in the surrounding paragraphs:

(a)    At [12], his Honour concludes that the fact that the bulk of the evidence and hearing time was focussed on that part of the case in respect of which the TWU failed was not necessarily a sufficient basis upon which to deprive the TWU of its costs incurred in securing overall success in the litigation. His Honour considered that a prudent party may not consider it open to take the forensic course of placing sole reliance upon a contention that it was not engaged in trade or commerce. His Honour referred to the factual issue of whether the statements were likely to mislead or deceive as not being “left to chance” and “no matter how briefly that question was to be addressed”.

(b)    At [13], his Honour explained that the factor which warranted the apportionment of costs:

is that the very reason the Union engaged in the conduct the subject of its dispute with ALDI was to call ALDI to account as to its transport practices. The Union sought to resist ALDI’s claims in this proceeding by attempting to further vindicate its concerns as to ALDI’s transport practices. The safety of ALDI’s transport operations was at the very heart of the Union’s case. And upon this issue, namely the manner in which it was expressing its concerns, the Union failed.

(c)    At [15] and [16], his Honour said that that conclusion was not affected by other factors, including the offers that had been made by ALDI to resolve the proceeding.

80    The primary judge’s reasoning at [13] was at the heart of the TWU’s appeal against the Costs Judgment.

81    In relation to the four causes of action that were abandoned, his Honour concluded that (Costs Judgment [17]):

…it is again considered that no separate order for costs should be made. Although it may readily be appreciated that there may have been impediments to those causes of action prevailing, a party should not be discouraged from abandoning causes of action during the course of a hearing and focussing attention upon those causes of action which are perceived to have greater prospects of success.

82    We infer that, in that paragraph, his Honour is principally addressing the TWU’s submission that it should be awarded indemnity costs in respect of the abandoned causes of action. However, we observe that the effect of his Honour’s order is that the TWU received an order for only 50% of its costs of the abandoned causes of action and there is no explanation of why the TWU is not entitled to the whole of its costs of the abandoned causes of action on the normal basis.

Consideration

TWU’s submissions

83    In respect of the costs of the s 18 and injurious falsehood claims, the TWU submitted that the primary judge’s finding at [13] had no basis in circumstances where the TWU was a respondent to the proceeding and was therefore brought to Court to defend the impugned communications.

84    In respect of the abandoned claims, the TWU submitted that the primary judge asked himself the wrong question. In considering whether indemnity costs should be awarded, the relevant question is whether the claims were unreasonably pursued or without proper foundation and not the possible discouragement of a party from abandoning claims. The TWU submitted that the abandoned claims were always hopeless. ALDI pursued a secondary boycott claim under s 45D of the CCA in circumstances in which there was never any evidence that the supply or acquisition of goods was hindered and ALDI conceded no substantial loss or damage was suffered as required by s 45D(1)(b). ALDI pursued trespass and nuisance claims with respect to conduct in a public place and in the absence of any suggestion that special damage had been suffered.

ALDI’s submissions

85    ALDI submitted that the primary judge had a broad discretion to award costs. The Court may depart from the usual order that costs follow the event if it is satisfied that there is some special or unusual feature in the case justifying that course. In the present case, ALDI submitted that the primary judge supported the exercise of his discretion to award the TWU 50% of its costs by reference to his finding that the bulk of the evidence and hearing time was focused on that part of the case in respect of which the TWU was unsuccessful. ALDI also submitted that the reasons given by the primary judge for refusing indemnity costs in respect of the abandoned claims were sound.

Consideration

86    The Court’s discretion to award costs under s 43 of the FCA Act is broad and is not bound by rigid or inflexible rules. The discretion must be exercised judicially, consistently with the purpose of the power and taking account of relevant facts and circumstances of the litigation: Kazar v Kargarian (2011) 197 FCR 113 at [4] per Greenwood and Rares JJ; Northern Territory v Sangare (2019) 265 CLR 164 at [24]-[25]. In Oshlack v Richmond River Council (1998) 193 CLR 72 (Oshlack), Gaudron and Gummow JJ observed (in respect of an equivalent statutory costs power) (at [22], citations omitted):

The power conferred by the section is to be exercised judicially, that is to say not arbitrarily, capriciously or so as to frustrate the legislative intent. However, subject to such considerations, the discretion conferred is, to adapt the words of Dixon J, unconfined except in so far as "the subject matter and the scope and purpose" of the legislation may enable an appellate court to pronounce the reasons given by the primary judge to be "definitely extraneous to any objects the legislature could have had in view".

87    While the power to award costs under s 43 is not confined by express statutory limitations, its exercise is to be guided by well-established principles in order to promote consistency in decision-making: Norbis v Norbis (1986) 161 CLR 513 at 519 (Mason and Deane JJ, with whom Brennan J generally agreed).

88    Usually the discretion to award costs is exercised in favour of a successful party: Oshlack at [35] per Gaudron and Gummow JJ, [66]-[67] per McHugh J and [134] per Kirby J; Foots v Southern Cross Mine Management Pty Ltd (2007) 234 CLR 52 at [25] per Gleeson CJ, Gummow, Hayne and Crennan JJ. However, a successful party may be deprived of a proportion of its costs, or even required to pay costs to the other party, if the successful party succeeded only upon a portion of its claim, or failed on issues that were not reasonably pursued, or where the result of the litigation might be described as mixed: Ruddock v Vadarlis (No 2) (2001) 115 FCR 229 at [11]ff per Black CJ and French J; Queensland North Australia Pty Ltd v Takeovers Panel (No 2) (2015) 236 FCR 370 at [11] per Dowsett, Middleton and Gilmour JJ. Nevertheless, the mere fact that a court does not accept all of a successful party’s arguments does not make it appropriate to apportion costs on an issue-by-issue basis: Australian Trade Commission v Disktravel [2000] FCA 62 at [3]-[4] per French, Kiefel and Mansfield JJ; The State of Victoria v Sportsbet Pty Ltd (No 2) [2012] FCAFC 174 at [8] per Emmett, Kenny and Middleton JJ; Firebird Global Master Fund II Ltd v Republic of Nauru (No 2) (2015) 327 ALR 192 (Firebird) at [6] per French CJ, Kiefel J (as her Honour then was), Nettle and Gordon JJ.

89     We consider that the primary judge erred in failing to address the argument advanced by the TWU that it was entitled to indemnity costs with respect to the claims that were abandoned because the claims were unreasonably brought. Further, it seems to us that it is unclear from the primary judge’s reasons whether he erred in awarding TWU only 50% of its costs of the claims which ALDI pursued.

90    In relation to the claims that were abandoned, self-evidently the TWU was wholly successful. The mere fact that claims are abandoned during a trial does not justify an order for indemnity costs. However, an award might be made if the Court were to conclude that the claims had no prospect of success: Gersten v Minister for Immigration & Multicultural Affairs [2001] FCA 260 at [19] (Lee, Carr and Sackville JJ); Dowling v Fairfax Media Publications Pty Ltd (No 2) [2010] FCAFC 28 at [44] (Graham, Logan and Flick JJ). In the present case, the primary judge did not address the question of whether the abandoned claims had no prospect of success. We consider that the failure to address that question was an error in circumstances where the TWU was seeking an order for indemnity costs. It was no answer to that enquiry that “a party should not be discouraged from abandoning causes of action during the course of a hearing and focussing attention upon those causes of action which are perceived to have greater prospects of success” (Costs Judgment [17]). Indeed, we consider that that statement reflects an error of principle. While the purpose of an order for costs is to compensate the successful party and not to punish the unsuccessful (Latoudis v Casey (1990) 170 CLR 534 at 543 per Mason CJ, 563 per Toohey J and 567 per McHugh J), an award of costs against an unsuccessful litigant is inevitably a “spur to settlement” (Cachia v Hanes (1991) 23 NSWLR 304 at 318 (Handley JA, with whom Clarke JA agreed)). The same is true, to a stronger extent, in the case of an order for indemnity costs. While the reason that a Court may order indemnity costs because of the unreasonable conduct on the part of a litigant in persisting with a hopeless cause of action is to compensate the successful party more fully, the order creates a stronger incentive toward abandoning causes of action that have no prospects of success at an earlier point in time. Refraining from ordering indemnity costs creates the opposite incentive.

91    In our view, the primary judge’s treatment of the costs of the abandoned causes of action contains a further error. The effect of the primary judge’s orders is that the TWU has been awarded 50% of its costs of the abandoned claims. There is no explanation by the primary judge why the discount that was applied to the claims that were maintained should also be applied to the claims that were abandoned. While the 50% discount applied to all claims might have been a conclusion that the primary judge arrived at as an overall assessment of all competing factors, no such reasoning is apparent from the face of the Costs Judgment.

92    In relation to the claims that were maintained, the TWU was wholly successful. Like the circumstances considered by the High Court in Firebird, this is not a case where it might be said that the event of success is contestable. In accordance with well-established principle, the general rule is that costs follow the event unless circumstances exist that justify a departure from that rule. While finding that the TWU was largely unsuccessful on the question whether the communications were misleading or deceptive within the meaning of s 18 and that that issue occupied the majority of the evidence and hearing time, on one view of his Honour’s reasons he concluded that that circumstance was not a sufficient basis to deprive the TWU of its costs (Costs Judgment [12]). On another view of his Honour’s reasons, his Honour was saying no more than that the TWU was not to be penalised in respect of costs merely for addressing the issue of whether or not its statements were misleading or deceptive. His Honour went on to conclude that the TWU should be deprived of 50% of its costs (of the claims that were maintained) for the reason that the TWU “sought to resist ALDI’s claims in this proceeding by attempting to further vindicate its concerns as to ALDI’s transport practices”, which concerns were the reason the TWU engaged in the impugned conduct (Costs Judgment [13]). In our respectful opinion, it is unclear precisely what his Honour was saying in this respect. The alternatives are as follows. His Honour considered that the TWU’s defence of the claim that its statements were misleading or deceptive did not go beyond what was reasonable but for the fact that it was also able to use the defence as an opportunity to further vindicate its concerns as to ALDI’s transport practices. In our opinion, to reduce the TWU’s costs not by reason of its conduct but by reason of its purpose or intention would be an error, particularly in circumstances where his Honour found that the TWU’s concerns about the transport industry were genuine and understandable (Principal Judgment [93] and [105]). On the other hand, bearing in mind his Honour’s broad judicial discretion with respect to costs, it would not have been an error for his Honour to reduce the TWU’s costs if he considered that by its conduct in the defence of the claim that its statements were misleading or deceptive, it went beyond what was reasonable to address the issue and not leave it “to chance”. We do not need to resolve these alternative constructions of the primary judge’s reasons because, as we have explained, there are other errors in the exercise of his Honour’s discretion as to costs and we consider that it is preferable that the costs of the proceeding be assessed in totality and not segregated and therefore the question of costs should be remitted to the primary judge for reconsideration.

Conclusion on TWU’s appeal

93    For the foregoing reasons, we consider that the costs orders made by the primary judge should be set aside. However, we do not consider that this Court is in a position to exercise the discretion to award costs in the proceeding. On the material presently before the Court we are not able to make an assessment whether the abandoned claims were hopeless and bound to fail so as to justify an order for indemnity costs. As we have said, it is preferable that the costs of the proceeding be assessed in totality and not segregated. Accordingly, the appropriate order is to remit the question of costs to the primary judge for reconsideration in accordance with the reasons of this Court.

D.    CONCLUSION

94    In conclusion, we consider that ALDI has failed to demonstrate any error in the primary judge’s conclusions that the impugned communications were not made in trade or commerce and that the TWU had not been shown to be a trading corporation. We therefore dismiss the appeal with costs. Conversely, we are persuaded that the primary judge’s Costs Judgment contains errors of principle that are material to his Honour’s exercise of discretion to award costs. We therefore uphold the TWU’s appeal, set aside the primary judge’s orders with respect to the costs of the proceeding and remit the question of costs to the primary judge for reconsideration in accordance with these reasons.

Associate:    

Dated:    22 December 2020