FEDERAL COURT OF AUSTRALIA
TRADE PRACTICES - Consumer Protection - misrepresentations made in course of lectures - sponsoring organisation charging admission fee and making videotape and audio cassette recordings of lectures for sale - subject matter of lectures of scientific, religious and historical interest - lecturer unpaid - whether lecturer made misrepresentations “in” trade or commerce - whether lecturer made misrepresentations “in” a business activity.
WORDS AND PHRASES - “in trade or commerce”
Fair Trading Act 1987 (NSW) ss 4 (“trade or commerce”, “business”), 42
Trade Practices Act 1974 (Cth) s 52
Re Ku-ring-Gai Co-operative Building Society (No 12) Ltd (1978) 36 FLR 134 (considered)
Concrete Constructions (NSW) Pty Ltd v Nelson (1990) 169 CLR 594 (applied)
O’Brien v Smolonogov (1983) 53 ALR 107 (considered)
Durant v Greiner(1990) 21 NSWLR 119 (referred to)
Prestia v Aknar (1996) 40 NSWLR 165 (referred to)
IAN RUTHERFORD PLIMER v ALLEN ROBERTS & ANOR
ng 480 OF 1997
DAVIES, BRANSON, LINDGREN JJ
5 DECEMBER 1997
sydney
|
IN THE FEDERAL COURT OF AUSTRALIA |
|
On appeal from a judge of the federal court of australia
|
BETWEEN: |
IAN RUTHERFORD PLIMER AppELLANT
|
|
|
AND: |
ALLEN ROBERTS First Respondent
ARK SEARCH ASSOCIATION INC Second Respondent
|
|
|
DATE OF ORDER: |
||
|
WHERE MADE: |
||
THE COURT ORDERS THAT:
1. The appeal be dismissed.
2. The appellant pay the respondents’ costs.
Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
|
IN THE FEDERAL COURT OF AUSTRALIA |
|
|
NEW SOUTH WALES DISTRICT REGISTRY |
ng 480 of 1997 |
On appeal from a judgment of a judge
of the Federal Court of Australia
|
BETWEEN: |
IAN RUTHERFORD PLIMER Applicant
|
|
AND: |
ALLEN ROBERTS FIRST RESPONDENT
ARK SEARCH ASSOCIATION INC SECOND RESPONDENT
|
|
CORAM: |
DAVIES, branson & LINDGREN jj |
|
DATE: |
5 december 1997 |
|
PLACE: |
SYDNEY |
REASONS FOR JUDGMENT
Davies J: The facts and issues are set out in the reasons for judgment prepared by Lindgren J. I agree with the substance of the reasons expressed by his Honour but would express some views of my own.
Section 42(1) of the Fair Trading Act 1987 (NSW), which Act is representative of the statutory provisions relied upon, provides:
"(1) A person shall not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive."
Section 4(1) includes these definitions:
"businessincludes:
(a) a business not carried on for profit, and
(b) a trade or profession.
...
trade or commerceincludes any business or professional activity"
The words "trade" and "commerce" are commonly used words of the English language. The term "trade and commerce" or "trade or commerce" has appeared many times in Australian statutes. It was pointed out in Concrete Constructions (NSW) Pty Ltd v Nelson (1990) 169 CLR 594 at 602, that as s 52 of the Trade Practices Act 1974 (Cth) draws its power from s 51(i) of the Australian Constitution, in which the expression "Trade and commerce" appears, s 52 should be given a meaning consonant with that head of legislative power. Because the provisions of the Fair Trading Act so closely mirror the provisions of the Trade Practices Act, s 42 of the Fair Trading Act should be given a similar interpretation, subject to any contrary legislative intention which has been expressed.
The expanded definitions of the Fair Trading Act to which I have referred can be read consistently with and should not be read as abrogating the reasoning adopted in Concrete Constructions where, at 603, after referring to remarks of Dixon J in Bank of New South Wales v The Commonwealth (1948) 76 CLR 1 at 381, Mason CJ, Deane, Dawson & Gaudron JJ said:
"... the words `in trade or commerce' refer to `the central conception' of trade and 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."
Therefore, for the purposes of the provisions which are found in s 52 of the Trade Practices Act and in s 42 of the Fair Trading Act, the judgment of Mason CJ, Deane, Dawson & Gaudron JJ in Concrete Constructions governs the approach to be taken. Their Honours said at 604:
"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. ... In some areas, the dividing line between what is or what is not conduct `in trade or commerce' ... may require the identification of what imports a trading or commercial character to an activity which is not, without more, of that character."
Although the terms of the statutory provisions express a clear idea and are readily understood, the concept is a complex one and the precise limits of what is or is not trade and commerce or what act is in or is not in trade or commerce cannot be definitively stated, either in general terms or for the purposes of any particular statutory provision in which the words appear. In marginal cases, the circumstances of the case must be considered and many factors must be taken into account.
Section 4(1) of the Fair Trading Act defines the term "business" to include a business not carried on for profit. But it is not to be implied from that definition that the Act intends that all non-profit activities constitute a business or that the existence or absence of a profit-making objective is not a relevant factor in a determination as to whether there is a relevant business activity. It is not in dispute, of course, that a non-profit organisation can carry on a business and that it can engage in trade or commerce.
In the present case, there are several factors to be considered, but the starting point is that the subject matter of Dr Roberts' lectures, in which the misleading and deceptive statements occurred, was not trade or commerce. Dr Roberts had taken an interest in a subject which, of itself, was non-commercial in character. Dr Roberts had been active in seeking to determine whether material which lay under the soil at or near Mt Ararat was the remains of Noah's Ark. An aim of the Noah's Ark Research Foundation, an unincorporated association which the trial Judge referred to as "NARF", and with which Dr Roberts and, later, Ark Search Association Inc ("Ark Search") were associated, was to "provide a professional approach to the planning, procedural and practical outcome of a research program" into theMt Ararat site.
Although there were monetary incidents to the lectures such as entry fees, the lectures were not concerned with commerce but rather with the promotion of a creationist view of history and the investigation of a matter of great historical interest. The lectures were not given for the purpose of financial gain but for the achievement of other objectives. The people who were involved in arranging the lectures were volunteers who freely contributed their time and their monetary support. The audience at the lectures attended, one would assume, because of the historical and religious significance of a finding and identification of Noah's Ark.
Dr Roberts was an author and had written about the Mt Ararat site. However, it has not been suggested that, in the relevant lectures, he was carrying on a profession of author or speaker. Nor were there any financial arrangements between Dr Roberts and NARF with respect to the lectures. He received no payment for them.
Another point to note is that, although it may be accepted that, when tapes and videos of Dr Roberts' lectures were sold by NARF and Ark Search, the sales were activities in trade or commerce, the relevant statements which were made by Dr Roberts and which were held to be in breach of s 42 were not made in the course of those sales. The lectures were the subject of the sales but the sales themselves were not misleading or deceptive. The consumers obtained what they sought and what they paid for. What was alleged was that aspects of Dr Roberts' lectures, when given orally during the meetings and when expressed in the tapes and videos, were misleading or deceptive conduct in trade or commerce. It is therefore necessary to consider whether there was some business, trading or commercial activity in the course of which the lectures took place. The trial Judge considered that there was no such trading or commercial activity.
Although it may well be that NARF and perhaps Ark Search carried on a business, albeit an apparently unsuccessful one, that point is important only if the business activities of NARF gave the designated character to the relationship between Dr Roberts and those who attended the lectures and purchased the tapes and videos. Dr Roberts was not a member of NARF, although he played a significant part in its affairs. NARF was set up by supporters of Dr Roberts to assist him in progressing the search for Noah's Ark and, presumably, the dissemination of a creationist view of history. It therefore should not be concluded, and the trial Judge rejected the view, that the lectures were given as a part of or in the course of NARF's business. What NARF did was to assist Dr Roberts to give the lectures which he wished to give and which he gave to achieve his own objectives. As the trial Judge held:
"In giving his lectures, and contributing to the publications, Dr Roberts was not primarily motivated by a desire to promote any business activities of NARF."
In his lectures, Dr Roberts spoke on the historical and religious significance of the site. The audience attending his lectures and the purchasers of the tapes and videos obtained that which they wished to hear, Dr Roberts' address on Noah's Ark and Mt Ararat. The relevant context in which the misleading statements were made was, in my opinion, as in the opinion of the trial Judge, not a business, trading or commercial one. Dr Roberts spoke about, and his audience came to hear him speak on matters of historical significance and of religious and scientific concern. The misleading statements were not "made in the course of, or for the purposes of, some trading or commercial dealing" between Dr Roberts and the members of the audience or the purchasers of the tapes and videos.
The crucial distinction between "`the central conception' of trade or commerce" and other activities was made clear by Mason CJ, Deane Dawson & Gaudron JJ in Concrete Constructions at 604:
"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."
In the present case, there was no trading or commercial dealing or relationship between Dr Roberts and the members of his audience or the purchasers of the tapes or videos of his lectures. Dr Roberts spoke of non-commercial matters and his audiences were present because of their interest in these matters. I agree with the trial Judge that Dr Roberts' misleading statements were not made in "trade or commerce" including in "any business or professional activity" as those expressions are used in the Fair Trading Act, that is to say, that the impugned conduct was not an aspect of "trade or commerce" as defined.
I am therefore of the view that the conclusions reached by the trial Judge were correct and that the appeal from his judgment should be dismissed with costs.
|
I certify that this and the preceding five (5) pages are a true copy of the Reasons for Judgment herein of the Honourable Justice Davies |
Associate:
Date: 5 December 1997
|
IN THE FEDERAL COURT OF AUSTRALIA |
|
|
NEW SOUTH WALES DISTRICT REGISTRY |
NG 480 of 1997 |
|
BETWEEN: |
IAN RUTHERFORD PLIMER Applicant
|
|
AND: |
ALLEN ROBERTS First Respondent
ARK SEARCH ASSOCIATION INC Second Respondent
|
|
JUDGE(S): |
BRANSON j |
|
DATE: |
5 DECEMBER 1997 |
|
PLACE: |
SYDNEY |
REASONS FOR JUDGMENT
I have had the great benefit of reading in draft the reasons for judgment of Lindgren J. I agree with his Honour’s conclusions but wish to express short reasons of my own.
Lindgren J has set out the background to this appeal and has analysed the reasons of the learned trial judge and the submissions of the parties on the appeal. I gratefully adopt all that his Honour has said in those regards. Like both his Honour and the learned trial judge I shall refer to the Fair Trading Act 1987 (NSW) (“the FTA (NSW)”) as illustrative of the analogous legislation of all States and the Australian Capital Territory. In doing so I recognise that not all of this legislation is in identical terms, but the differences, on the view which I have taken of this matter, are not material; none of the Fair Trading Acts contains a broader definition of “trade and commerce” than the FTA (NSW).
By para 10 of the second further amended statement of claim (“the statement of claim”), the applicants pleaded that each of the respondents had, in trade or commerce, made certain representations to the public. The representations itemised in para 10 of the statement of claim include the three representations which the learned trial judge found had been made by Dr Roberts and were false. Those representations (“the relevant misrepresentations”) were pleaded as follows:
“(aa) public lectures given by the First Respondent and recorded on video and audio tapes contain a summary of archaeological and/or scientific work carried out by the First Respondent; ...”
“(g) the First Respondent has used or caused to be used powerful metal detectors and by that and other means has carried out or caused to be carried out original research into the Formation;...”.
“(i) the First Respondent has submitted or caused to be submitted or is the course of submitting or causing to be submitted, the artefacts found on the site of the Formation to careful and objective scientific scrutiny or testing (including but not limited to radio-carbon dating);...”.
The learned trial judge found that representations (aa) and (g) were entirely false and that representation (i) was false insofar as it conveyed the impression that Dr Roberts was personally involved in carbon-dating. It would appear that insofar as representation (i) might be understood as referring to the issue of Dr Roberts’ personal involvement in “scientific scrutiny or testing” as conveyed in the lectures, it was false on the findings made by the learned trial judge in relation to representation (aa). However, his Honour was of the view that the statement made by Dr Roberts on an audio cassette as to his involvement in carbon-dating could not amount to a representation about scientific testing generally.
No finding was made that Ark Search Association Inc, the second respondent at the hearing, had made any of the representations pleaded in para 10 of the statement of claim. Ark Search Association Inc was not incorporated until after the last of the lectures in the course of lectures delivered by Dr Roberts. Although the Notice of Appeal makes complaint of the trial judge’s failure to find that the second respondent made representations in trade or commerce within the meaning of s 52 of the Trade Practices Act 1974 (Cth) (“the TPA”), this complaint was not pressed in the appellant’s outline of submissions nor was it pressed orally before this Court. The complaint need not be further considered.
The complaint pressed on appeal was that the learned trial judge should have found that Dr Roberts, by making the relevant misrepresentations, had, in trade or commerce, engaged in conduct that was likely to mislead or deceive contrary to s 42(1) of the FTA (NSW).
Section 42(1) of the FTA (NSW) provides as follows:
“A person shall not, in trade or commerce, engage in conduct that is misleading or deceptive or likely to mislead or deceive.”
Section 4(1) of the FTA (NSW) contains the following inclusive definitions:
“trade or commerce includes any business or professional activity”; and
“business includes:
(a) a business not carried on for profit, and
(b) a trade or profession.”
I agree with Lindgren J that the above definition of “trade or commerce” may be expanded to read “trade or commerce includes any business activity or any professional activity.” In my view, within the meaning of this definition, a business activity is an activity in business which of itself bears a business character and a professional activity is an activity in the course of the conduct of a profession which of itself bears a professional character.
It does not seem to me that s 4(1) of the FTA (NSW) discloses an intention to include within the notion of trade or commerce an activity which, whilst characteristic of the carrying on of a business (whether carried on for profit or not) or characteristic of the carrying on of a trade or profession, is not in fact undertaken in any business, trade or profession. No doubt it is relatively uncommon for an activity which is characteristic of say, the carrying on of a business, to be undertaken outside of a business. However, in my view, it does happen. There are, it seems to me, activities which, although characteristic of the carrying on of a business, in the sense that they tend to suggest the carrying on of a business, are not of themselves sufficient to give the venture in which they are undertaken the character of a business. For example, whilst the keeping of accounts by double entry bookkeeping may be an activity which is characteristic of business, the fact that such accounts are kept by, say, an unemployed student in receipt of Austudy, does not of itself lead to the conclusion that the student is conducting a business. It merely indicates that he or she attends to his or her private affairs in a business-like way.
It similarly seems to me that s 4(1) of the FTA (NSW) does not disclose an intention to include within the notion of trade or commerce an activity which, whilst conducted in the course of a business or profession, does not itself bear the character of a business or professional activity in the sense discussed above. To borrow an example given by Mason CJ, Deane, Dawson and Gaudron JJ in Concrete Constructions (NSW) Pty Ltd v Nelson (1990) 169 CLR 594 (“Concrete Constructions”) at 603, in a discussion of the ambit of s 52 of the TPA, such an interpretation would bring within s 42(1) of the FTA (NSW) misleading conduct constituted by the giving of an incorrect traffic signal in the course of driving a vehicle for, and in the course of, a business.
It is not to be forgotten, however, that the inclusive definition of the phrase “trade or commerce” in s 4(1) of the FTA (NSW) does not detract from that which is independently conveyed by the terms “trade” and “commerce” in s 42(1) of the FTA (NSW).
The appellant did not contend either at trial or before this Court that Dr Roberts carried on any business within the meaning of the FTA (NSW) or was himself engaged in trade or commerce. It was the contention of the appellant that the unincorporated association promoting Dr Roberts’ lectures, the Noah’s Ark Research Foundation (“NARF”), was engaged both in a non-profit business and in trade and that the relevant misrepresentations were made in that non-profit business or in that trade within the meaning of s 42(1) of the FTA (NSW).
I have not found it necessary to consider whether NARF was engaged in a relevant business, whether non-profit or otherwise. In my view, it is plain that, on the evidence led at trial, NARF was engaged in trade within the meaning of s 42(1) of the FTA (NSW) in selling videotapes, audio cassettes, publications and other materials.
In Concrete Constructions at 602, Mason CJ, Deane, Dawson and Gaudron JJ noted:
“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 [Trade Practices] Act.”
The same may also, of course, be said of the identical words used in s 42(1) of the FTA (NSW).
In Re Ku-Ring-Gai Co-operative Building Society (No. 12) Ltd (1978) 36 FLR 134, at 139, Bowen CJ said:
“The terms “trade”and“commerce” are ordinary terms which describe all the mutual communings, the negotiations verbal and by correspondence, the bargain, the transport and the delivery which comprise commercial arrangements. The word “trade” is used in its accepted English meaning: traffic by way of sale of exchange or commercial dealing. The commercial character of trade was mentioned more recently by Lord Reid in Ransom v Higgs [[1974] 1 WLR 1594]. His Lordship there said: “As an ordinary word in the English language “trade” has or has had a variety of meanings or shades of meaning. Leaving aside obsolete or rare usage it is sometimes used to denote operations of a commercial character by which the trader provides to customers for reward some kind of goods or services.” Moreover, the word covers intangibles, such as banking transactions, as well as the movement of goods and persons, for historically its use has been founded upon the elements of use, regularity and course of conduct”. [citations omitted]
In the same case, at 167, Deane J said:
“The terms “trade” and “commerce” are not terms of art. They are expressions of fact and terms of common knowledge. While the particular instances that may fall within them will depend upon the varying phrases [sic] of development of trade, commerce and commercial communication, the terms are clearly of the widest import. They are not restricted to dealings or communications which can properly be described as being at arm’s length in the sense that they are within open markets or between strangers or have a dominant objective of profit-making. They are apt to include commercial or business dealings in finance between a company and its members which are not within the mainstream of ordinary commercial activities and which, while being commercial in character, are marked by a degree of altruism which is not compatible with a dominant objective of profit-making.” [citations omitted]
The trial judge found, indeed it was not disputed, that NARF had sold videotapes, audio cassettes, publications and other materials at the meetings which it held over the period early April 1992 to 8 June 1992. The videotapes and audio cassettes were sold at only eleven or twelve meetings of the total of thirteen meetings as it was necessary to record Dr Roberts’ early lectures before videotapes and audio cassettes could be made. The proceeds of all such sales totalled about $11,000, whilst door receipts from the meetings totalled $16,394. In the light of such findings, it seems to me to be an inevitable conclusion that NARF was at such meetings engaged in trade within the meaning of s 42(1) of the FTA (NSW), at least to the extent that it was engaged in the sale of videotapes, audio cassettes, publications and other materials. It may be, but it is not necessary to decide, that the holding of the meetings was itself part of that trading activity.
The facts of this case are, in my view, readily distinguishable from those considered by the Full Court of this Court in O’Brien v Smolonogov (1983) 53 ALR 107. In O’Brien’s Case it was held that a single private sale by an individual of land which was not part of the individual’s trading stock, which was not used for any business activity and which was not sold as part of the carrying on of land development was not conduct “in trade or commerce”. By contrast, in this case, the sales of videotapes and audio cassettes took place at eleven or twelve meetings; such videotapes and audio cassettes were made, and thereafter sold, for the purpose of raising funds for NARF; and they were, during the course of the last eleven or twelve of the meetings, trading stock of NARF.
The crucial issue on this appeal is that of whether Dr Roberts’ conduct, in making the relevant misrepresentations, was conduct inthe trade in which NARF was engaged within the meaning of s 42(1) of the FTA (NSW).
The leading authority on the significance of the phrase “in trade or commerce” in s 52(1) of the TPA is Concrete Constructions. In that case Mason CJ, Deane, Dawson and Gaudron JJ, at 601-602, observed:
“The general heading “Consumer Protection” at the commencement of Part V is part of the Act (Acts Interpretation Act 1901 (Cth), s 13). It constitutes part of the context within which the substantive provisions of Pt V must be construed and should be taken into consideration in determining the meaning of those provisions in case of ambiguity. The heading does not, however, control the permissible scope of the substantive provisions of Part V and cannot properly be used to impose an unnaturally constricted meaning upon the words of those substantive provisions. As a matter of language, s 52 prohibits a corporation from engaging in misleading or deceptive conduct “in trade or commerce” regardless of whether the conduct is misleading to, or deceptive of, a person in the capacity of a consumer.” [citation omitted].
It may be noted that s 42(1) of the FTA (NSW) is not included in Part 4 of the Act which is headed “Consumer Protection”, but in Part 5 which is headed “Fair Trading”. Adopting the approach of the majority of the High Court in Concrete Constructions, there is in the case of s 42(1) no justification for imposing an unnaturally constricted meaning upon the words of s 42(1). Further, I note that s 35 of the Interpretation Act 1987 (NSW), like s 13 of the Acts Interpretation Act 1901 (Cth), provides that headings to Parts of an Act shall be taken to be part of the Act. Thus, in respect of s 42(1) of the FTA (NSW), the heading “Fair Trading” constitutes part of the context in which the section must be construed.
However, in Concrete Constructions, Mason CJ, Deane, Dawson and Gaudron JJ went on to say at 602-603:
“The phrase “in trade and 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 and commerce” can be construed as encompassing conduct in the course of the myriad of activities which are not, of their nature, of a trading or commercial character but which are undertaken in the course of, or as incidental to, the carrying on of an overall trading or commercial business. ... Alternatively, the reference to conduct “in trade and commerce” in s 52 can be construed as referring only to conduct which is itself an aspect or element of activities or transactions which, of their nature, bear a trading or commercial character. So construed, to borrow and adapt words used by Dixon J in a different context in Bank of NSW v The Commonwealth [(1948) 76 CLR 1], the words“in trade and commerce” refer to “the central conception” of trade and commerce and not to the “immense field of activities” in which corporations may engage in the course of, or for the purpose of, carrying on some overall trading or commercial business.”
For present purposes, there is, in my view, no significant difference between the above approach adopted by Mason CJ, Deane, Dawson and Gaudron JJ, and that adopted by Toohey J in the same case at 612-614. Toohey J pointed out in respect of s 52(1) of the TPA, that whilst there is no justification for restricting the class of persons who may claim relief in reliance on s 52(1) to persons who answer the description of “consumers”, the fact that the conduct upon which the claim for relief is founded must be conduct “in trade or commerce” indicates that the section is concerned with commercial activity, the provision of goods and services for reward. His Honour observed at 614:
“Even taking a broad view of s 52(1) 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 and commerce. It must have been in trade and commerce. While there are dangers in seeking for the meaning of an expression through the substitution of another, the phrase “as part of trade and commerce” does, I think, come close to what is intended.”
As Sackville J pointed out in this case at first instance, the Fair Trading Acts of the States and the ACT were enacted as a result of an agreement reached in June 1983, at a meeting of consumer affairs Ministers, that there should be uniform fair trading laws in Australia. The relevant provisions of the Fair Trading Acts are modelled on Part V of the TPA, except that the State and ACT legislationapplies to “persons” rather than to “corporations”. The preposition “in” in the phrase “in trade or commerce” in s 42(1) of the FTA (NSW) will operate by way of limitation in the same way as the identical preposition operates in the identical phrase in s 52(1) of the TPA. Such an operation is consistent with the inclusion of s 42(1) in Part 5 of the FTA (NSW) which is headed “Fair Trading”.
The crucial issue to be determined on this appeal is thus whether the conduct of Dr Roberts in making the relevant misrepresentations, which it may be assumed were misleading or deceptive, was conduct “in” the central conception of the trade of NARF, or by contrast, merely in the “immense field of activity” in which NARF was engaged, in the course of, or for the purposes of, its trade. Or, to adopt the language of Toohey J, whether such conduct was engaged in by Dr Roberts as part of the trade of NARF as opposed to in connection with such trade or in relation thereto.
I point out that even if it be assumed, contrary to the findings of the trial judge, that NARF was relevantly engaged in a business activity, within the meaning of the inclusive definition of “trade or commerce” contained in s 4(1) of the FTA (NSW), the crucial issue would be whether the conduct of Dr Roberts in making the relevant misrepresentations was conduct “in” the central conception of that business activity.
In giving consideration to the issue of whether the conduct of Dr Roberts in making the relevant misrepresentations was conduct “in” the central conception of the trade of NARF, it is important to bear in mind that Dr Roberts was not himself engaged in the relevant trade. Indeed, the trial judge found that Dr Roberts was not a member of NARF. It was NARF that the appellant contended, in my view correctly, was engaged in trade, relevantly by selling videotapes and audio cassettes, and possibly by the holding of meetings at which such recordings were sold.
The relevant misrepresentations were made by Dr Roberts during lectures delivered by him at a meeting or meetings held by NARF or, in one case, in response to a question asked of him during such a meeting. Each of the videotapes and audio cassettes sold by NARF records a lecture given by Dr Roberts. The relevant answer of Dr Roberts is recorded on an audio cassette which includes Dr Roberts’ lecture.
The trade in which NARF was relevantly engaged was the trade of selling videotape recordings and audio cassette recordings of a lecture or lectures given by Dr Roberts and, to a limited extent, questions asked of Dr Roberts on the occasion of the delivery of a lecture and his replies thereto. The accuracy of the videotape and audio cassette recordings is not challenged. There is no suggestion that the videotapes or audio cassettes misrepresent the lectures given by Dr Roberts or his answers to questions. Dr Roberts’ lectures and answers were not themselves concerned with matters of trade or commerce within the meaning of the FTA (NSW).
In my view, the accuracy of the content of Dr Roberts’ lectures and answers, as opposed to the accuracy of the recordings thereof, was not “the central conception” of the trade of NARF. Alternatively put, the conduct of Dr Roberts in making the relevant misrepresentations was not part of NARF’s trade, although his lectures and answers had a close connection to that trade, and, indeed, were necessary to it. Those who were the counterparty to NARF in its trade received from NARF that which they expected to receive, namely, accurate recordings of a lecture given by Dr Roberts and, in some cases, of questions asked of him and his replies thereto.
If it be assumed, contrary to the findings of the trial judge, that NARF was relevantly engaged in a business activity by selling the videotape recordings and audio cassettes, the above analysis would equally demand the conclusion that the conduct of Dr Roberts, which was constituted by the making of the relevant misrepresentations, was not conduct “in” that business activity.
It is, I consider, appropriate to note that were ss 52(1) of the TPA and 42(1) of the FTA (NSW) to have the broader operation contended for by the appellant, they would, in my view, provide a significant deterrent to intellectual and religious debate in this country, at least so far as it is carried on through commercial avenues.
In my view, the appeal should be dismissed with costs.
I certify that this and the preceding
nine (9) pages are a true copy of the
Reasons for Judgment herein of The
Honourable Justice Branson.
Associate:
Dated:
|
IN THE FEDERAL COURT OF AUSTRALIA |
|
On appeal from a judge of the federal court of australia
|
BETWEEN: |
AppELLANT
|
|
AND: |
First Respondent
ARK SEARCH ASSOCIATION INC Second Respondent
|
|
JUDGEs: |
|
|
DATE: |
|
|
PLACE: |
REASONS FOR JUDGMENT
INTRODUCTION
The appellant (“Professor Plimer”) appeals from a decision of a Judge of the Court given on 2 June 1997 by which his Honour dismissed Professor Plimer’s application. His Honour’s judgment is now reported at (1997) 70 FCR 489. There was another applicant in the proceeding below, Mr David Fasold, who sought, inter alia, damages for infringement of copyright. His Honour awarded Mr Fasold damages of $2,500 against the first respondent (“Dr Roberts”) and dismissed his similar claim against the second respondent (“Ark Search Inc”).
On 11 September 1997, his Honour made orders that Dr Roberts pay Mr Fasold’s costs on the claim of infringement of copyright; that Professor Plimer and Mr Fasold pay Dr Roberts’ and Ark Search Inc’s costs in respect of claims made against them under the Fair Trading Acts of the States and Territories and the Trade Practices Act 1974 (Cth) (“the TP Act”), and that the parties bear their own respective costs on a cross-claim brought by Dr Roberts and Ark Search Inc, which his Honour described as “essentially of a defensive nature.”
No appeal is brought in respect of the decisions in relation to the claim of infringement of copyright. In fact, the notice of appeal gave as a ground that his Honour erred “in awarding the first appellant [sic] a sum for damages for the infringement of his copyright which was totally disproportionate to the injury”. However, the damages for infringement of copyright were awarded not to Professor Plimer, but, as already noted, to Mr Fasold and Mr Fasold was not a party to the appeal. On the hearing it was made clear that the ground had been included in error.
As will be seen, the learned trial Judge found that misleading or deceptive conduct had been engaged in by Dr Roberts, but not “in trade or commerce”. The question on the appeal is the narrow one whether his Honour erred in this respect.
FACTUAL BACKGROUND AND REASONING OF THE TRIAL JUDGE
The following account of the factual background is taken from the comprehensive and detailed reasons of the trial Judge.
Professor Plimer is a Professor of Geology and the Head of the School of Earth Sciences at the University of Melbourne. He is a member of an organisation known as the Australian Skeptics, which has provided him with some financial support in respect of the proceedings in this Court. Dr Roberts is an ordained Christian Minister whose career includes a period as the principal of a Bible College in Sydney. He was the founding principal of the Australian College of Christian Education. He described himself in an affidavit before the trial Judge as “an historical researcher in archaeological work as it relates to the boat-shaped formation in Turkey ... which I believe may be Noah’s Ark.” Dr Roberts’ academic qualifications lie in the field of education. His doctorate was attained at a Christian University in the United States, in the field of Christian education.
The trial Judge explained the origin of the present dispute in the following terms:
“Professor Plimer claims to have been affronted by what he says were misleading or deceptive statements made in the course of public lectures given by Dr Roberts throughout Australia in April and May 1992. Professor Plimer also complains about statements made or authorised by Dr Roberts in certain publications and in video and audio tapes of the lectures. The lectures and publications of which Professor Plimer complains advance the hypothesis that a boat-shaped geological formation at a place known as Akyayla, near Mt Ararat in Eastern Turkey (to which I refer as the Site [as do I]), is or could contain the remnants of Noah's Ark, thereby providing tangible evidence of the literal truth of the account of the great flood in Genesis, 6:13 - 8:19. It is important to appreciate that Professor Plimer's case, as presented on his behalf, is not directed to establishing the invalidity of the hypothesis put forward by Dr Roberts. Rather, Professor Plimer relies on what he says is the falsity of particular statements made by Dr Roberts in the lectures and in the publications.” (at 493)
Ark Search Inc was incorporated on 25 June 1992 as an association under the Associations Incorporation Act 1991 (ACT). According to its Treasurer, it receives support primarily from members of the Christian community to further its purposes, which include the investigation of the Site to determine whether it contains the remnants of Noah’s Ark.
The incorporation of Ark Search Inc was preceded by the establishment in March 1991 of an unincorporated association known variously as the “Noah’s Ark Foundation”, “Noah’s Ark Research Foundation”, “Noah’s Research Project” and “Ark Search”. Like the trial Judge, I will refer to the unincorporated association as “NARF”. Certain public meetings addressed by Dr Roberts at which publications and tapes were sold explaining and promoting the activities of NARF and, in particular, of Dr Roberts, were conducted under the auspices of NARF. Indeed, most of the important events of which Professor Plimer complained preceded the incorporation of Ark Search Inc. Dr Roberts was described on NARF’s letterhead and in other documentation produced by it or with its authority as its “Archaeological Research Consultant”. However, his Honour accepted Dr Roberts’ evidence that he was not a member of NARF.
Professor Plimer pleaded that Dr Roberts engaged in misleading or deceptive conduct in trade or commerce by making sixteen false representations. His Honour found that Dr Roberts made three of the sixteen, numbers 2, 9 and 10, which were false. They were as follows:
“2. The public lectures given by Dr Roberts and recorded on videotapes and audio cassettes contain a summary of archaeological and/or scientific work carried out by him.”
“9. Dr Roberts has used or caused to be used powerful metal detectors and by that and other means he has carried out or caused to be carried out original research into the Site.”
“10. Dr Roberts submitted or caused to be submitted the artefacts found at the Site to careful and objective scrutiny or testing, including radio-carbon dating.”
They were all made by Dr Roberts in his lectures. Representation 10 was made in answer to a question put to him on the occasion of the giving of a lecture (Dr Roberts also had a role in relation to a NARF newsletter and brochure but the three false representations were made in the context of his lectures).
Contrary to Dr Roberts’ submission, his Honour held that the effect of Dr Roberts’ conduct as established by the evidence was that he represented that he personally had done the various things referred to in these paragraphs. In fact, he had not done so. His Honour added a qualification in relation to representation 10. He noted that the same evidence was relied upon to support the making of that representation and representation 2; that the evidence did not support the making of representation 10 in the precise terms in which it was pleaded; and that the pleading of the two representations rather than one carried Professor Plimer’s case no further.
His Honour dealt at length with the question whether the representations were made in trade, or commerce. He referred to subs 42(1) of the Fair Trading Act 1987 (NSW) (“FTA (NSW)”) as illustrative of the legislation of all States and the Australian Capital Territory:
“42(1)A person shall not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive.”
Subsection 4(1) of the FTA (NSW) contains the following pertinent definitions:
“trade or commerce includes any business or professional activity.”
“business includes:
(a) a business not carried on for profit, and
(b) a trade or profession.”
Clearly (a) both definitions are inclusory ones, and (b) in the definition of “trade or commerce”, the word “business” is adjectival while it is itself defined as a noun. I will return to these matters later.
His Honour gave an account of various other provisions of the FTA (NSW) and then referred to the legislation of the other jurisdictions in the following terms:
“The following legislation is, in substance, identical to that in force in New South Wales except for the reference to the Supreme Court of that State: Fair Trading Act 1989 (Qld), ss 5, 38(1), 98(5), 99; Fair Trading Act 1987 (WA), ss 5, 10(1), 74(2), 77; Fair Trading Act 1992 (ACT), ss 5, 12(1), 44(5), 48. The Fair Trading Act 1985 (Vic)(FTA (Vic)), s 11(1) is identical toFTA (NSW), s 42(1), while s 5(4) of the FTA (Vic) provides that ‘a reference to trade or commerce includes a reference to a business not carried on for profit’. The FTA (Vic), ss 34(4) and 39 are in substance identical to FTA (NSW), ss 65(6) and 68, respectively. The Fair Trading Act 1987 (SA) (FTA (SA))s 56(1) is identical to FTA (NSW), s 42(1). The FTA (SA), s 3(1) defines ‘business’ to include a trade or profession, but the definition does not include a business not conducted for profit. In this respect the FTA (SA) differs from the legislation of the other States and the ACT. The FTA (SA), ss 83(5) and 84 are in substance identical to FTA (NSW), ss 65(6) and 68, respectively. The Fair Trading Act 1990 (Tas) (FTA (Tas)), ss 3 and 14(1) are in substance identical to ss 4(1) and 42(1) of the FTA (NSW), respectively. However, the FTA (Tas) does not include a provision equivalent to FTA (NSW) s 65(6). The FTA (Tas), s 46(1) is in substance identical to FTA (NSW) s 68(1).” (at 522)
Since none of the definitions are broader than that of the FTA (NSW) and it has not been disputed that Dr Roberts engaged in the conduct in question in New South Wales, it was appropriate for his Honour (and it is appropriate for this Full Court) to test Dr Roberts’ conduct against the FTA (NSW).
After noting the parties’ respective contentions, his Honour first addressed the question “Did NARF Conduct a Business?” He said:
“It is of course clear that NARF sold videotapes, audio cassettes, publications and other materials at the 13 meetings held over the period 1 April 1992 to 8 June 1992 (including the last meeting held at Forbes in New South Wales). A very small number of sales took place after the meetings had concluded. The proceeds from sales of merchandise totalled about $11,000, while door receipts from the meetings totalled $16,394. However, the mere fact that sales took place and entry fees were collected from those attending meetings does not necessarily demonstrate that NARF was engaged in a "business" within the meaning of the Fair Trading Acts.” (at 523-4)
After referring to several authorities in which the word “business” or the expression “carrying on business” had been considered, the trial Judge noted that the instant case involved an organisation which was said to be carrying on a business otherwise than for profit. He concluded his discussion of the present issue in the following passage which includes a useful summary of some of the relevant evidence:
“In my view, the less commercial the character and objectives of an organisation, the greater the degree of system and regularity required for the organisation’s activities to be characterised as a ‘business’. This approach, in my view, is consistent with the purposes underlying the Fair Trading Acts, namely to establish standards of conduct applicable to commercial and consumer transactions: Prestia v Aknar [(1996) 40 NSWLR 65 (SCNSW/Santow J)], at 180, 183. If the net is cast too widely, the legislation will apply to transactions that are not truly commercial in character and confer protection on persons who cannot fairly be described as consumers.
NARF's objectives were not primarily trading or commercial in character. Its principal objectives were to encourage and support further investigation at the Site and to publicise what its founding members saw as the significance of the Site. These objectives reflected the religious and ideological orientation of its founding members. Of course, as I have accepted, even a voluntary organisation pursuing purely altruistic or charitable goals can conduct a business. But, in my opinion, the activities carried out by NARF lacked the degree of system and regularity that is normally required before such an organisation can be said to conduct a business.
As I have found, NARF had no office premises and no retail outlets. It had no paid staff and no infrastructure, other than volunteer labour. Its letterhead initially nominated Dr Roberts' home address as its own address; later a post office box number was substituted. The organisation's records were maintained by a volunteer, Mr Hannaford.
The meetings at which fees were collected and tapes and publications sold took place over a period of about two months. There was no evidence that the national tour, which took in all Australian States and the ACT, was to be a forerunner for similar events in the future. The tour was a ‘one-off’ venture, intended to take advantage of the interest stimulated by Dr Roberts' trip to the Site. A total of 13 meetings took place, organised with the assistance of volunteers in the various cities. As events transpired, no public meetings were held after 8 June 1992, either by NARF or the newly incorporated Ark Search Inc. The meetings were designed, in part, to raise funds. But they were also designed to promote interest in and support for the objectives of the organisation. So, too, with the merchandise that was sold. Moreover, the raising of funds was to take place, not merely through the sale of merchandise and entry fees, but through donations to the organisation.
Sales of merchandise during the period of the meetings were modest and barely covered the costs of production. Entry fees received were greater, but still of modest dimensions. I accept that a business, particularly one not conducted for profit, need not necessarily generate large returns. Nonetheless, the scale of the undertaking is a relevant consideration, particularly where the content of the publications or services provided reflect the ideological or religious perspectives of the organisation. In this instance, in my view, the sales of merchandise and the charging of entry fees were incidental to NARF's non-commercial objectives.
I have borne in mind that the policy of consumer protection, which underlies the Fair Trading Act (although it is not the exclusive focus of the legislation) requires that the test for determining whether a particular undertaking is a business should not be set too high. Nonetheless, while the circumstances of the present case are perhaps close to the line of what constitutes a ‘business’, I conclude that NARF was not undertaking a ‘business’ within the meaning of the Fair Trading Acts. It follows that the applicants' argument, insofar as it rests on the foundation that NARF was engaged in business, must fail.” (at 525-6 - emphasis supplied)
The trial Judge next addressed the question whether Dr Roberts made the representations “in trade or commerce”. The opening paragraph of this part of his Honour’s Reasons, which Professor Plimer attacked on the appeal, was as follows:
“Much of the argument before me was conducted on the assumption that NARF was engaged in business. I have concluded that the assumption is unfounded. Nonetheless, having regard to the course of argument, I think it appropriate to address the position on the basis that (contrary to my view) NARF was engaged in business. The question, then, is whether, accepting that NARF was engaged in business, Dr Roberts made representations ‘in trade or commerce’. I turn to that question.” (at 526 - emphasis supplied)
His Honour reviewed the authorities, deduced several propositions from them and then proceeded to answer the question “Did Dr Roberts Make Statements in Trade or Commerce?” In answering the question, his Honour described the following matters as “particularly important”:
“• There was no commercial or trading relationship between Roberts and NARF. He was not paid to deliver the lectures; nor was he paid to contribute to the newsletter or the brochure. He had no expectation of remuneration from his activities on behalf of NARF. He had an expectation that NARF would apply funds to assist him to conduct further investigations in Turkey, but this neither established nor reflected a trading or commercial relationship.
• NARF was staffed by volunteers, who adhered to its objectives, principally the encouragement of investigations at the Site to ascertain whether it contained the remains of the biblical Noah's Ark. Its steering committee sought to raise funds for its objectives by a variety of means, including donations, membership fees, entrance fees and sales of publications and tapes. To the extent NARF carried on a business, the business was modest in scope and was incidental to the broader goal of promoting the association's objectives.
• In giving his lectures, and contributing to the publications, Dr Roberts was not primarily motivated by a desire to promote any business activities of NARF. His objectives were to disseminate his own views and to assist NARF to raise funds for its objectives. He was aware that funds were to be raised in part by the sale of merchandise, but he was also aware that funds were to be raised by membership fees and donations.” (at 531-2)
His Honour distinguished Glorie v W A Chip & Pulp Co Pty Ltd (1981) 55 FLR 310 (FCA/Morling J) (“Glorie”) as a case in which the principal objective of the presentation to the public (in that case through a film) was the commercial interests of its sponsors in the following terms:
“Unlike Glorie, the principal objective of Dr Roberts’ presentation, whether in the publications or the lectures, was not to promote the commercial interests of NARF. Unlike the corporate members of the association in Glorie [an association of companies engaged in wood chipping which joined with the Western Australian Forests Department to produce a documentary film entitled Forests Forever], NARF was not a commercial or trading organisation. Nor was Dr Roberts’ principal motive in giving the lectures or contributing to the brochure or newsletter to promote the business activities of NARF. He was concerned to promote his ideas and to encourage interest in the Site. As I have previously found, he was aware and intended that his activities would assist in raising funds for NARF. But those funds were to be raised in a variety of ways, including membership fees and donations, and the sale of tapes and publications was only one element in fund raising. .... The complaints were about his lectures (live and on tape) and about the contents of the publications available for purchase, one of which (the brochure) was available only at the last of the meetings.” (at 532)
His Honour also distinguished Meadow Gem Pty Ltd v ANZ Executors & Trustee Co Ltd [1994] ATPR (Digest) 46-130 (SCVic/Hedigan J) (“Meadow Gem”), a case concerning pleaded allegations of statements by Victorian Government officials to the effect that certain building societies were secure and had adequate asset backing. In that case, Hedigan J held, on a strike-out application, that it was arguable that the statements had been made “in trade or commerce” on the basis that the encouragement of the making or retention of investments in a trading corporation could include “promotion” of a trading or commercial activity. Distinguishing the facts of Meadow Gem, the trial Judge said:
“Doubtless, some people listening to the lectures were inspired to purchase a copy of a tape. But Dr Roberts did not seek to maintain or encourage a commercial relationship between his audience and a trading entity.” (at 532)
His Honour expressed his conclusion on the present issue as follows:
“In my opinion, in the circumstances of the present case, Dr Roberts' conduct in giving the lectures and allowing them to be recorded was not an element of activities which, of their nature, bear a trading or commercial character. The same is true of his participation in the preparation of the newsletters and brochure. Whatever might have been said about NARF's or even Dr Roberts' activities in advertising the lectures and sales of tapes, Dr Roberts' activities lacked the qualities that would allow them to be characterised as conduct in trade or commerce. They had a relationship with trade or commerce, but that is not enough to attract the Fair Trading Acts.” (at 532)
His Honour noted that although injunctive and declaratory relief was sought against Ark Search Inc as well as against Dr Roberts, little attention had been addressed in argument to its position. His Honour observed that Ark Search Inc, if not a moribund organisation, conducted virtually no activities beyond selling a small number of videotapes, audio cassettes and brochures and distributing a few newsletters, none of which it had prepared, produced or promoted, and that from the sales it had derived a few hundred dollars. His Honour concluded that Ark Search Inc was not engaged in trade or commerce and had therefore not contravened s 52 of the TP Act. On the hearing of the appeal, senior counsel for Professor Plimer accepted that we need to consider the activities of NARF and not those of Ark Search Inc.
OUTLINE OF SUBMISSIONS ON THE APPEAL
Outline of Professor Plimer’s submissions on the appeal
Professor Plimer’s submissions on the appeal proceeded along the following lines:
“1. His Honour’s reasoning comprised the following steps:-
1.1 The definition of ‘trade or commerce’ in the Fair Trading Act involves the carrying on of a business.
1.2 NARF did not carry on a business.
1.3 Even if it did, the respondent’s activities were not in trade or commerce.
2. To succeed, the respondent must maintain 1.1 and 1.2 or must maintain 1.3.
3. The appellant submits that each of the three conclusions contains an error of law.” (Professor Plimer’s written submissions on the appeal)
1.1 The first and simplest flaw in the trial Judge’s reasoning was to assume that it was necessary that NARF have carried on a business. But the definition of “trade or commerce” states that the expression “includes any business or professional activity.” It is sufficient to show that the relevant activities of NARF were “trade or commerce”. His Honour did not consider this question. NARF was engaged in “trade” and the representations occurred “in” that trade.
1.2 NARF did carry on a business. His Honour’s approach was influenced by his view that:
“ ..., the less commercial the character and objectives of an organisation, the greater the degree of system and regularity required for the organisation’s activities to be characterised as a ‘business’.” (at 525)
No authority referred to by his Honour supports this proposition. In principle, it is wrong.
“Why should there be a different quantitative standard because of the difference in quality? Why is a minimal quantity of commercial activity sufficient whereas a larger quantity of activity is required for a charity or other voluntary organisation? Why should one need more ‘system and regularity’ to constitute a business than the other. Putting this a little differently, if there are 4 sections of a square:-
|
|
Big |
Small |
|
Commercial |
Big commercial organisation |
Small commercial organisation |
|
Non-profit |
Big non-profit organisation |
Small non-profit organisation |
what logic is there in saying that the first three involve a ‘business’ but that the fourth (italicised) does not?” (Professor Plimer’s written submissions on the appeal)
The correct approach is to ascertain the necessary qualitative content, bearing in mind that “a business not carried on for profit” may qualify, and then to ascertain the necessary quantitative content (sufficiently systematic and regular activities). It is wrong to apply the latter test in a different way according to whether or not the business is carried on for profit. In relation to his conclusion that NARF was not carrying on a “business”, his Honour described the circumstances of the present case as being “perhaps close to the line”. This indicates that if he had not erroneously required a higher standard of system and regularity for a non-profit body, he would probably have reached the opposite conclusion. The evidence shows that NARF was in fact carrying on a non-profit business. [An appendix to Professor Plimer’s written submissions on the appeal gave many references to the evidence relied on in support of this contention.]
1.3 His Honour emphasised Dr Roberts’ purposes, but the true test is concerned with the objective relationship between his statements and NARF’s activities. The fact that Dr Roberts expected NARF to apply funds to assist him in conducting further investigations in Turkey is of great significance - a significance which (contrary to his Honour) is not reduced by the fact that it neither established nor reflected a trading or commercial relationship. Similarly, the fact that Dr Roberts was aware that NARF’s funds were to be raised in part by the sale of merchandise was significant. The fact that Dr Roberts, by his lectures, caused NARF to raise money from membership fees and donations which would facilitate grants to him for his investigations in Turkey, indicates that his addresses were made in trade or commerce. The present case is stronger than Meadow Gem because here, the maker of the statement (Dr Roberts) had an “interest” in the success of the other organisation (NARF), unlike the Victorian Government officials in Meadow Gem.
If Professor Plimer succeeds, there should be declaratory and injunctive relief. Although the trial Judge touched on the question of remedy, he did not take into account the facts that Dr Roberts had transferred his half share in his home to his wife within two or three weeks after Mr Fasold complained of infringement of copyright, and that Ark Search Inc went into a members’ voluntary winding-up one month before the trial, neither of which events was explained at the trial. There should be at least a declaration that Dr Roberts engaged in misleading or deceptive conduct in trade or commerce, and possibly an injunction restraining Dr Roberts from continuing to engage in such conduct.
Professor Plimer seeks no relief against Ark Search Inc.
Outline of submissions of Dr Roberts and Ark Search Inc on the appeal
Professor Plimer cannot succeed on the appeal because the trial Judge considered the question of injunctive relief and said that he would have been inclined not to grant it because there was no evidence of a threat of repetition of any misleading or deceptive conduct and his Honour was not prepared to infer that repetition was likely. No ground is shown for interfering with his Honour’s discretionary decision not to grant relief. Dr Roberts relies, in particular, on the following passage from his Honour’s judgment:
“... considerable care must be exercised before making orders restraining statements made in the course of public discussion on issues regarded by many people as important to their religious or ideological beliefs, at least where the motivation for making such statements is not primarily, commercial in character. Unless caution is exercised, there is a serious risk that the courts will be used as the means of suppressing debate and discussion on issues of general interest to the community.” (at 550 - emphasis in original)
Notwithstanding the presence of inclusory definitions of ‘trade or commerce’ and ‘business’ in the Fair Trading Acts and their absence from the TP Act, the two should not be construed differently.
Meadow Gem is distinguishable. It was a decision on a strike-out motion to which the low threshold test of ‘arguability’ applied. The statements directed to ‘shoring up’ a building society allegedly made in that case are far removed from the representations found to have been made in the present case, since the purpose of Dr Roberts’ statements was to promote interest in the Site in furtherance of religious beliefs.
Professor Plimer’s argument would make the sale (whether for a profit or not) of any religious tract actionable under the Fair Trading Acts, an absurd result which surely cannot represent the law.
Professor Plimer must demonstrate that what Dr Roberts did was in trade or commerce. His Honour found no falsity other than in the content of the lectures. NARF advertised the lectures, not their content. It did not represent (nor was any such representation pleaded, and NARF was not a party in any event) that the content of the lectures was true.
REASONING ON THE APPEAL
Two preliminary matters
It is useful to note two matters at the outset. The first arises from the following passage in the trial Judge’s Reasons:
“Much of the argument before me was conducted on the assumption that NARF was engaged in business. I have concluded that the assumption is unfounded. Nonetheless, having regard to the course of argument, I think it appropriate to address the position on the basis that (contrary to my view) NARF was engaged in business. The question, then, is whether, accepting that NARF was engaged in business, Dr Roberts made representations ‘in trade or commerce’. I turn to that question.” (at 526)
This passage assumes that unless NARF was engaged in business, Dr Roberts could not have made the representations in trade or commerce.
The ultimate question arising from s 42 of the FTA (NSW) is whether Dr Roberts, in trade or commerce, engaged in conduct that was misleading or deceptive or was likely to mislead or deceive. The relevant conduct of Dr Roberts which the trial Judge found to have been misleading or deceptive was the making of statements in the course of his giving public, video-recorded and audio-recorded lectures. It is, perhaps, understandable, in view of the fact that the parties before him appear to have concentrated attention on the “business” aspect of the definition of “trade or commerce”, that his Honour expressed himself in the way in which he did in the passage set out above. The possibility must be considered, however, that since the definition of “trade or commerce” is expressed as an inclusory one, Dr Roberts might have made the statements “in trade or commerce”, though not in “any business or professional activity.” As a matter of the language of the definition, it was necessary for his Honour to decide the more general question whether Dr Roberts made the statements “in trade or commerce”, even consistently with his conclusion that NARF was not engaged in business. But the fact is that his Honour did address that question quite independently of the statutory definition. It follows that if there would otherwise be substance in Professor Plimer’s first attack on his Honour’s reasoning, the attack is inconsequential.
The second preliminary matter concerns the definitions of “trade or commerce” and “business” in s 4. I take the word “business” in the definition of “trade or commerce” to be an adjective which, like the adjective “professional”, qualifies the noun “activity”. Accordingly, the prohibition in s 42 can be read as follows:
“42(1)A person shall not, in trade or commerce (including in any business activity or in any professional activity), engage in conduct that is misleading or deceptive or is likely to mislead or deceive.”
Section 4 defines the word “business” to include a business not carried on for profit and a trade and a profession. There is a discordance between this definition of the noun “business” and the adjectival use of the word “business” in the definition of “trade or commerce”. The definition of the noun “business” must somehow be adapted to the adjectival sense of “business” in the definition of “trade or commerce”.
There arises the question whether there is a meaningful distinction between “non-profit business” activity, “trading” activity and “professional” activity on the one hand, and, respectively, activity engaged in in the actual carrying on of “a business”, of “a trade” or of “a profession” on the other. If it be correct that the inclusory definition of “business” requires the actual carrying on of a non-profit business or of a trade or of a profession before it has any adjectival work to do in the definition of “trade or commerce”, that adjectival work would perhaps be less than if the meaning were “of a kind characteristic of a business not carried on for profit or of a trade or of a profession”.
Although the present distinction is a fine and difficult one, I think that, consistently with the clearly adjectival senses of “business” and “professional” in the definition of “trade or commerce”, what the notion of “business ... activity” incorporated into the definition of “trade or commerce” includes, is activity which is unequivocally and distinctively characteristic of the carrying on of a non-profit business, or of the carrying on of a trade, or of the carrying on of a profession. The distinction will, perhaps, rarely be of practical importance and the most straightforward way of demonstrating that the inclusory definition is brought into play in a particular case will be to show that the conduct in question was engaged in in the course of the actual carrying on of a particular non-profit business or trade or profession.
Concrete Constructions (NSW) Pty Ltd v Nelson (1990) 169 CLR 594
Unlike the trial Judge, I would begin rather than end by addressing the expression “in trade or commerce”. The expression has proved difficult. Clearly, it is intended to limit the reach of the various prohibitions found in the TP Act and the Fair Trading Acts. The approaches which have been taken to its construction fall into three classes which can be identified as follows:
1. “in the ‘trade or commerce’ area of national activity as distinct from the ‘non-trading’ and ‘non-commercial’ areas of national activity”;
2. “in the course of, or for the purpose of, an overall trading or commercial activity of a particular enterprise”;
3. in (as part of) a particular trading or commercial dealing, transaction or activity.
The first and second constructions can now be put to one side, because the third and narrower construction has been authoritatively favoured in the leading case on the meaning of the expression in the context of a statutory prohibition against engaging in conduct that is misleading or deceptive, namely, Concrete Constructions (NSW) Pty Ltd v Nelson (1990) 169 CLR 594 (“Concrete Constructions”). Previous expressions of opinion on the question (such as that of Nimmo J in Larmer v Power Machinery Pty Ltd (1977) 14 ALR 243 (FCA) at 245 - “the whole field in which the nation’s trade or commerce is carried on”) must be understood with this in mind.
Concrete Constructions was a decision on s 52 of the TP Act. The case concerned a representation by the foreman of a construction company to a co-employee who later sued their employer for damages in respect of injuries suffered by him at work. The foreman instructed the employee to remove certain grates from the entry points of certain air conditioning shafts and informed him that each grate was secured by certain bolts. It was claimed by the employee that this statement was untrue and that while he was removing one of the grates, it gave way, causing him to fall to the bottom of the shaft and to suffer injuries. In his claim for damages, the employee pleaded that by reason of the foreman’s statement, the employer had, in trade or commerce, engaged in conduct that was misleading or deceptive in contravention of s 52 of the TP Act.
All five members of the High Court agreed that the function of the expression “in trade or commerce” in s 52 of the TP Act, was to limit the scope of the kind of misleading or deceptive conduct caught by the section. However, they achieved that result in different ways. In their joint judgment, Mason CJ, Deane, Dawson and Gaudron JJ, held that the heading “Consumer Protection” to Part V of the TP Act (in which Part, s 52 occurs) does not have the effect of confining the operation of s 52 to “cases involving the protection of consumers alone” (at 602). Their Honours accepted, however, that the heading “Consumer Protection” influenced the effect of the words “in trade or commerce”.
The joint judgment emphasised that the prohibition addressed conduct engaged in “in” trade or commerce. It distinguished (at 603) between “the central conception” of trade or commerce (cf Bank of New South Wales v The Commonwealth (1948) 76 CLR 1 at 381), which they thought the provision contemplated, and 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”, which they thought it did not contemplate. Noting that the arguments for and against these narrower and broader constructions were “fairly evenly balanced” (at 603), their Honours preferred the narrower. They said:
“ ... 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. 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 hand signal 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.
The alleged misleading or deceptive conduct of the Company’s foreman in the present case consisted of an internal communication by one employee to another employee in the course of their ordinary activities in and about the construction of a building. It follows from what has been said above that that conduct was not, for relevant purposes, conduct ‘in trade or commerce’ and would not, if established, constitute a contravention of s.52 of the Act.” (at 603-5 - emphasis supplied)
Brennan, Toohey and McHugh JJ delivered separate judgments. They agreed with the joint judgment’s conclusion that the foreman’s statement was not made in trade or commerce. In various ways, however, their Honours did not find it necessary to limit the impugned conduct by reference to “the central conception” of trade or commerce. They substituted other limiting factors. Brennan and McHugh JJ found the limitation in a requirement that the conduct proscribed must be conduct which misleads or deceives, or is likely to mislead or deceive, a person in his or her capacity as a consumer. Their Honours’ view was that it sufficed that the impugned conduct took place in the course of a trading or commercial activity or transaction as, they conceded, it did in the case before them, provided always it misled or deceived a person in that capacity or was likely to do so. The foreman’s statement was not made to his co-employee in the latter’s capacity as a consumer.
Toohey J agreed with Brennan and McHugh JJ that s 52 of the TP Act was aimed at “conduct ... deceptive of persons in their capacity as consumers of goods and services” (at 614) and that the foreman’s statement to his co-employee did not merit that description. As well, however, his Honour thought that the section caught only conduct that was engaged in “as part of” someone’s trade or commerce, and that although the foreman’s statements were made “in relation to” or “in respect of” his employer’s trade or commerce (the construction of buildings for others), they were not made “as part of” that trade or commerce.
Applicability of Concrete Constructions to the FTA (NSW)
It will be recalled that in their joint judgment in Concrete Constructions, Mason CJ, Deane, Dawson and Gaudron JJ referred to the heading of Part V of the TP Act, namely, “Consumer Protection”. Unlike s 52 of that Act, s 42 of the FTA (NSW) occurs in a Part which is headed “Fair trading”. Therefore, in contrast to the position in Concrete Constructions, the heading of the Part (Part 5) in which the prohibition with which we are concerned appears is not available to limit the kind of conduct at which the prohibition is directed, to “consumer oriented” conduct. Indeed, Part 4 of the FTA (NSW) is headed “Consumer protection” and the notion of a “consumer” (the term is defined in s 5 of the Act) is invoked in s 39 within that Part. These considerations suggest that s 42 of the FTA (NSW) is not intended to be confined by reference to conduct which is misleading or deceptive of, or which is likely to mislead or deceive, consumers. Support for this view is found in the Minister’s Second Reading Speech on the Bill for the Act (NSW Parl Debs, Hansard at 11856-7 and 11859, referred to by Santow J in Prestia v Aknar (1996) 40 NSWLR 165 at 179-180).
Nonetheless, in my opinion, for three reasons, but subject to any effect of the definition of the expression “trade or commerce” in the FTA (NSW) (discussed later), the “narrow” construction of the expression adopted in the joint judgment in Concrete Constructions governs the construction of the same expression in s 42 of the FTA (NSW). First, the “Consumer Protection” heading of Part V of the TP Act was only one of several matters relied on in the joint judgment to support the construction favoured by its authors. Secondly, the heading of Part 5 of the FTA (NSW), “Fair trading”, supports a construction that limits the prohibitions in that Part by reference to a person’s or organisation’s dealings (perhaps only trading) with others. Thirdly, their Honours perceived (at 602) “[t]he real problem involved in the construction of s. 52” (which they resolved) to arise from the use of the word “in”, and that same preposition also indicates, in an identical context, the relationship between “conduct” and “trade or commerce” in s 42 of the FTA (NSW).
In the result, subject to any effect of the statutory definition of “trade or commerce”, Concrete Constructions requires us to ask whether Dr Roberts’ misrepresentations were made “in” trading or commercial dealings between persons.
Relevant essential features of the facts of the present case
It is useful to note the following features of the facts:
1. The misrepresentations were made by Dr Roberts as part of the delivery of “lectures” which NARF would “sell” to interested members of the public by means of the admission charge to the auditorium or the sale of audio or video tape recordings of the lectures;
2. the seller was NARF, not Dr Roberts, who was not a member of NARF;
3. the misrepresentations were not about the services (lectures) or about the goods (audio or video tapes of the lectures), but were part of the lectures themselves;
4. NARF’s objective in selling was to make some profit, not for private pockets, but to fund further research by Dr Roberts;
5. Dr Roberts knew of NARF’s objective outlined in par 4 above.
Application of Concrete Constructions to the facts
The relevant misleading or deceptive conduct of Dr Roberts can be characterised as the making of misrepresentations in the course of his giving lectures on a subject of historical, religious and/or scientific interest (some, including, no doubt, Professor Plimer, would say pseudo-historical, pseudo-religious and/or pseudo-scientific interest, but this does not matter for present purposes).
In my opinion, Dr Roberts did not make the misrepresentations “in trade or commerce” according to the construction of that expression found in the joint judgment in Concrete Constructions.
While there is much to be said in favour of the proposition that NARF’s activity in selling the door tickets, videotapes and audio cassettes was conduct in trade or commerce, I find it unnecessary to decide whether it was. I shall assume that it was. (On the hearing of the appeal, counsel for Dr Roberts may have conceded that it was, but the terms of the concession were unclear.) In my opinion, Dr Roberts’ misrepresentations did not take place “in” that supposed trade or commerce of NARF.
The delivery of the lectures was not inherently a trading or commercial activity. The misrepresentations, made in the course of the giving of them, were not in the nature of a promotion of NARF’s selling of door tickets or videotapes or audio cassettes. The misrepresentations were no different, in the present respect, from misrepresentations made in the course of the giving of lectures or addresses in many familiar factual settings. A professor delivers a lecture to university students; an academic or other person presents a paper at a conference or seminar held for the practitioners of a profession; a public figure addresses a crowd in a hall. Assume that in each case the speaker is not paid but understands that the institution or organisation which has arranged the event is making an admission charge or will sell various recorded forms of the lecture or address, or both. In such cases, what is said in the course of the delivery of the lecture or address will not ordinarily be “in” trade or commerce, even if the charging and selling by the institution or organisation is. Dr Roberts’ misrepresentations were not placed “in trade or commerce” by the fact that, to his knowledge, an admission charge was being imposed and audio and video recordings were being made and were to be sold.
I have used the word “ordinarily” above to allow for the possibility of special cases. In their joint judgment in Concrete Constructions, Mason CJ, Deane, Dawson and Gaudron JJ acknowledged that:
“[i]n 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.” (at 604)
One can imagine features which might impart to the making of a misrepresentation in the course of a lecture or address the quality of being “in trade or commerce”. For example, the misrepresentation might properly be characterised as directed to promoting the sale of goods or services. Again, a lecturer might be conducting a business of giving lectures for profit for himself or herself.
Neither of these is the present case. Indeed, it will be recalled that the trial Judge found that there was no commercial or trading relationship between Dr Roberts and NARF; that he was not paid to deliver the lectures or to contribute to NARF’s newsletter or brochure; that he had no expectation of remuneration from his activities; that in giving his lectures and contributing to the publications, he was not primarily motivated by the desire to promote any business activities of NARF; and that his objectives were to propound his own views and to assist NARF to raise funds for NARF’s objectives.
The definitions in s 4 of the FTA (NSW)
As a matter of the language of the inclusory definition of “trade or commerce” in s 4 of the FTA (NSW), the further question arises whether, even though Dr Roberts’ conduct was not “in trade or commerce” as that expression has been construed in the joint judgment in Concrete Constructions, the definition extends to catch that conduct. In this context, the question addressed in the parties’ submissions was whether Dr Roberts made the misrepresentations “in” a “non-profit” (or even a “for profit”) business activity.
Again, I will assume, without deciding, that NARF was engaged in a business activity. For reasons of the same general kind as those which I gave above for concluding that Dr Roberts’ misrepresentations were not made “in” trade or commerce, I think that they were not made “in” the supposed business activity of NARF. The “strict” approach taken in the joint judgment in Concrete Constructions to the construction of the word “in” as it occurs in the expression “in trade or commerce” is also appropriately applied in the present context. Guided by their Honours, I think that what is caught is, relevantly, conduct which is engaged in in business activity according to the central conception of that notion. In the present context, including the context of the “Fair trading” heading to Part 5 of the FTA (NSW), this means, it seems to me, “in the course of, or as part of, business dealings with others.” Even if Dr Roberts’ lectures could be said to have had a connection with business activity (so understood) of NARF, this is not enough.
On the appeal, Professor Plimer referred the Court to evidence that, for example, NARF was well organised and had hopes of raising much money. Although such factors are, no doubt, relevant to the question of the complexion to be given to NARF’s conduct, they do not have the effect of converting what I regard as conduct by Dr Roberts in the course of a non-business activity by him, into conduct by him in the supposed business activity of NARF. “In” does not mean “in relation to” or “in connection with”, as Concrete Constructions makes clear.
Against the possibility that it should be thought relevant in view of what I have said earlier, I would add that the delivery of the lectures was also not characteristic of the carrying on of a business, whether for profit or not.
Further comments
Inclusory definitions are commonly used in order to enlarge or to clarify: to catch that which would not otherwise fall within the defined term, or to remove doubt as to whether something is or is not within the defined term; cf Pearce and Geddes, Statutory Interpretation in Australia (4th ed, Butterworths, 1996) at [6.36] to [6.40]; Bennion, Statutory Interpretation (2nd ed, Butterworths, 1992) at 413 et seq. In relation to the inclusory definitions of “trade or commerce” and “business” in s 4 of the FTA (NSW), the encompassing of “professional activity” within the former and of “a business not carried on for profit”, “a trade” and “[a] profession” within the latter, are, perhaps, understandable by reference to these common purposes of inclusory definitions. In The Fair Trading Acts (1989, Longman Professional), Everett and Ransom suggest that the introduction of the provision that “business includes ... (b) a trade or profession” was probably a reaction to the decision in Holman v Deol [1979] 1 NSWLR 640 (SCNSW/Lee J), in which it was held that under the then Consumer Claims Tribunals Act 1974 (NSW), the professional work of lawyers was not in trade or commerce. In their view, the definitions in the New South Wales, South Australian and Western Australian Acts have “made it abundantly clear that it does in their definitions of ‘business’” (at par [204]).
However, perhaps it is not so obvious why, by reference to the usual purpose of an inclusory definition, the legislatures enacting the Fair Trading Acts provided that “trade or commerce” included “[for profit] business activity”. Perhaps they intended to make clear that what was to be caught was not only conduct in business directed to consumers, but such conduct directed to business persons and entities as well.
It remains to note that I have not found it necessary for the purpose of resolving the issue presented by this case to reach a final view as to whether the definition of “trade or commerce” in s 4 of the FTA (NSW) is limited to include only those professional activities with others which can be described as “bearing a trading or commercial character”: cf Durant v Greiner (1990) 21 NSWLR 119 (SCNSW/Rolfe J) at 129; Prestia v Aknar (1996) 40 NSWLR 165 (SCNSW/Santow J) at 187E-194B, 194C. Nor have I found it necessary to address Dr Roberts’ further submissions noted earlier as to why the appeal should be dismissed.
CONCLUSION
The appeal should be dismissed with costs.
|
I certify that this and the preceding twenty-three (23) pages are a true copy of the Reasons for Judgment herein of the Honourable Justice Lindgren |
Associate:
Dated: 5 December 1997
|
Counsel for the Applicant: |
Mr D M J Bennett QC and Mr S L Walsmley |
|
Solicitor for the Applicant: |
McCabe Brown |
|
Counsel for the Respondents: |
Mr A Radojev and Mr M B Duncan |
|
Solicitor for the Respondents: |
Bush Burke & Co |
|
Date of Hearing: |
18 September 1997 |
|
Date of Judgment: |
5 December 1997 |
|
IN THE FEDERAL COURT OF AUSTRALIA |
|
|
NEW SOUTH WALES DISTRICT REGISTRY |
ng 480 of 1997 |
|
|
|
|
BETWEEN: |
IAN RUTHERFORD PLIMER Applicant
|
|
AND: |
ALLEN ROBERTS FIRST RESPONDENT
ARK SEARCH ASSOCIATION INC SECOND RESPONDENT
|
|
CORAM: |
DAVIES, BRANSON & LINDGREN JJ |
|
DATE: |
5 DECEMBER 1997 |
|
PLACE: |
SYDNEY |
CORRIGENDUM
Please amend the judgment of Davies J as follows:
In the last sentence of the second full paragraph of page 4 of the reasons for judgment of Davies J, please replace “trading or commercial” with “relevant”.
In the first full paragraph of page 6 of the reasons for judgment of Davies J, please delete the sentence: “Dr Roberts spoke of non-commercial matters and his audiences were present because of their interest in these matters.”
Associate to Davies J
Date: 5 December 1997
