|
|
[Home]
[Databases]
[WorldLII]
[Search]
[Feedback]
Federal Court of Australia |
COURT
IN THE FEDERAL COURT OF AUSTRALIACATCHWORDS
Trade Practices Act - action pursuant to Section 82 based on breach of Section 52 - allegedly inaccurate report of consulting engineers supplied to prospective tenderers for harbour dredging contract - scope of application of Section 52 - privately negotiated contract - relevance of headings "Consumer Protection" and "Unfair Practices" in Part V - Division 1 - interpretation of Section 52 - conduct not alleged to be unfair - whether statement of claim discloses cause of action.Trade Practices Act 1974 ss. 52 and 82
Trade Practices - Damages claimed under s. 82 for alleged breach of s. 52 - Geological report leading to dredging contract - Contract privately negotiated - Whether geological report misleading or deceptive - Whether allegations in statement of claim disclosed cause of action - Whether defences raised were valid answer in law to statement of claim - Whether Federal Court has jurisdiction to entertain claim in tort for damages based on Hedley Byrne & Co. Ltd. v. Heller & Partners Ltd. doctrine - Whether s. 52 was breached - Scope of application of s. 52 - Criteria of misleading or deceptive conduct - Whether conduct contained element of unfairness - Private negotiations leading to contract - Trade Practices Act 1974 (Cth), ss. 4, 4B, 52, 82.
High Court and Federal Judiciary - Jurisdiction - Whether Federal Court has jurisdiction to entertain claim in tort for damages based on Hedley Byrne & Co. Ltd. v. Heller & Partners Ltd. doctrine - Whether geological report misleading or deceptive - Trade Practices Act 1974 (Cth), ss. 4, 4B, 52, 82.
Statutes - Interpretation - Scope of application of s. 52 - Meaning of "consumer" - Mischief sought to be remedied by Act - Relevance of heading "Consumer Protection" and sub-heading "Unfair Practices" in Pt V of Act - Meaning of "trade or commerce" - Meaning of "protection" - Trade Practices Act 1974 (Cth), ss. 4, 4B, 52, 82. The applicant (Westham) claimed damages pursuant to s. 82 of the Trade Practices Act 1974, as amended, against the first respondent (Woodside) and the second and third respondents (the consulting engineers) for alleged breach of s. 52 of the Act. Woodside had supplied a report entitled the King Bay Report prepared by the consulting engineers, concerning the geological structure of a harbour basin, which later became the subject matter of a dredging contract between Westham and Woodside. Westham alleged that inaccurate geological data specified in that report was misleading or deceptive within the meaning of s. 52 of the Act. The respondents contended that the allegations in the statement of claim disclosed no cause of action. The respondents moved the court for orders that separate preliminary questions of law be decided before any further trial of the proceedings.
Held: (1) The defences raised by the first respondent were a valid answer in
law to the statement of claim, namely: "In further
answer to the whole of the
statement of claim the first-named respondent says that as a matter of law:
(a) the facts alleged in the
statement of claim do not disclose a cause of
action against the first-named respondent; (b) the conduct on the part of the
first-named
respondent referred to in the statement of claim is not conduct:
(i) in trade or commerce; or (ii) that was misleading or deceptive
or likely
to mislead or deceive."
(2) The defences raised by the second and third respondents in certain
paragraphs of their amended defence were valid answers in
law to the statement
of claim, namely: "The conduct of the second and third-named respondents
complained of was not conduct of the
nature or character to which s. 52 of the
Trade Practices Act was directed, namely conduct misleading or deceptive to
members of the public in their capacity as consumers, whether of goods,
services
or otherwise."
Section 52 of the Trade Practices Act did not give the Federal Court
jurisdiction to entertain what was in substance as between the applicant and
the second and third-named
respondents a claim in tort for damages for alleged
negligent statements based upon the doctrine of Hedley Byrne & Co. Ltd. v.
Heller
& Partners Ltd. [1963] UKHL 4; (1964) AC 465.
Hornsby Building Information Centre Pty. Ltd. v. Sydney Building Information
Centre Ltd. [1978] HCA 11; (1978) 140 CLR 216; R. v. Federal Court of Australia; Ex parte
Pilkington A.C.I. (Operations) Pty. Ltd. [1978] HCA 60; (1978) 142 CLR 113; World Series
Cricket Pty. Ltd. v. Parish (1977) 16 ALR 181; R. v. Credit Tribunal; Ex parte
General Motors Acceptance Corporation, Australia [1977] HCA 34; (1977) 137 CLR 545; Parkdale
Custom Built Furniture Pty. Ltd. v. Puxu Pty. Ltd. [1982] HCA 44; (1982) 56 ALJR 715,
referred to.
(3) Section 52 of the Trade Practices Act 1974 was not breached because of the following features of the facts alleged, namely: the absolutely private nature of the negotiations leading to the contract; the lack of any circumstances which could be described as "unfair practices" according to good business morality; and the lack of any allegation of fraud, negligence or deceit. An inaccurate report may be misleading or likely to mislead, but the other elements required were lacking.
Per St.John J. - When s. 52(1) is looked at as a whole, the conduct in question must contain an element of unfairness when judged by a high standard of business morality. Although an intention to mislead need not be proved, there must be a degree of unfairness when the transaction is looked at, including the relative bargaining positions of the parties in contractual situations.
Observations concerning the legislative history of the Trade Practices Act 1974 including amendments to s. 4(3), the scope of s. 52, and the mischief to be remedied by the Act, discussed.
HEARING
Sydney, 1982, December 7-8; 1983, March 3. 3:3:1983The respondents moved the Federal Court of Australia for orders that separate preliminary questions of law be decided before any further trial of the proceedings in which the applicant claimed damages pursuant to s. 82 of the Trade Practices Act 1974, as amended, for alleged breach of s. 52 of the Act against the respondents.
T.E.F. Hughes Q.C., J.D. Heydon and J.L. Allsop, for the applicant.
A.M. Gleeson Q.C. and A.R. Emmett, for the first respondent.
R.A. Conti Q.C. and S.J. Archer, for the second and third respondents.
Cur. adv. vult.Solicitors for the applicant: Freehill Hollingdale & Page.
Solicitors for the first respondent: Stephen Jaques Stone James.
Solicitors for the second and third respondents: Allen Allen & Hemsley.
J.D. WHITEHEAD
ORDER
1. I hold that the defences raised by the first respondent as set out in the judgment are a valid answer in law to the statement of claim. 2. I hold also, that the defences raised by the second and third respondents
in sub-paragraphs (ii) and (iv) of paragraph 16 of
their amended defence are
valid answers in law to the statement of claim.
THE COURT ORDERS THAT:
1. The applicant to pay the respondents' costs of the action to date, including those incurred in the preliminary questions of law and the motion in relation thereto. Orders accordingly.
DECISION
By statement of claim, the applicant, Westham Dredging Company Pty. Limited ("Westham") claimed damages pursuant to S.82 of the Trade Practices Act 1974 as amended ("the Act"), for alleged breach of S.52 of the Act against three respondents, firstly, Woodside Petroleum Development Pty. Limited ("Woodside") and also against Maunsell & Partners Pty. Limited and Stichting Nederlands Adviesbureau Voor Ingenieurswerken In Het Buitenland which I shall refer to as "the consulting engineers".Broadly, the cause of action is based upon the supply by Woodside of a report prepared by the consulting engineers as to the geological structure of a harbour basin which later became the subject matter of a dredging contract entered into between Westham and Woodside. Westham alleges that some of the geological data specified in that report was inaccurate and this affords them a right of action because such inaccuracies were misleading or deceptive within the meaning of S.52 of the Act.
Both Woodside and the consulting engineers moved the court for orders that separate questions of law be decided before any further trial in the proceedings and orders pursuant to those applications were made. The questions to be decided were whether or not certain defences raised by both Woodside and the consulting engineers were adequate answers in law to the statement of claim.
It is necessary to reproduce in some detail the allegations made in the
statement of claim and the defences relied upon by the respondents
whose basic
contention is that the allegations in the statement of claim disclose no cause
of action. A large part of the statement
of claim in its precise terms is
reproduced hereunder, but I shall interpolate in parenthesis summaries of some
allegations which
need not be fully reproduced and expanding others where
there is a need so to do.
STATEMENT OF CLAIM
Paragraph 1. (This paragraph simply alleges the incorporation of Westham and its entitlement to sue).
Paragraph 2. (This paragraph alleges that Woodside and the first of the consulting engineers are trading corporations for the purposes of S.4 of the Act).
Paragraph 3. (This paragraph alleges that the second named of the consulting engineers is a company incorporated in the Netherlands and is a foreign corporation for the purposes of S.4 of the Act).
Paragraphs 4 and 5.business in trade or commerce of carrying out and arranging the carrying out of exploration for oil and the provision and construction of all necessary facilities, including the dredging of any necessary ports or harbours, for such exploration.
"4. The first named respondent at all material times carried on the
Paragraph 6.
"6. In or about June 1980 the first named respondent invited the applicant
to submit tenders for a proposed contract to carry
out certain dredging and
associated reclamation and fill works at Phillip Point Supply Base at King
Bay, Dampier, Western Australia
("the Work").
PARTICULARSParagraph 7.
The said invitation was by letter to the applicant dated 23 June, 1980."
Paragraph 8.
"8. The Report was expressed at Page I-1.2 to be the result of a
comprehensive site investigation programme. Further, it was otherwise
indicated in the Report that it was detailed and extensive and that it was
designed for the purpose referred to in paragraph 7 above.
"PARTICULARSfollowing:
The Report otherwise indicated the matters referred to above by the
"9. On or about 14th July, 1980, the first, second and third named
respondents in trade or commerce in the course of the businesses
referred to
in paragraphs 4 and 5 above supplied and distributed to the applicant and
other tenderers or prospective tenderers copies
of the Report."
(Particulars of this paragraph describe the distribution of the report).
Paragraph 10.
"10. Further, in late August and early September 1980 the first, second
and third named "respondents in trade or commerce in the
course of the
businesses referred to in paragraphs 4 and 5 above supplied to the applicant
amended drawings and additional information
relating to the quantities and
materials to be dredged (such amended drawings and additional information
being hereafter referred
to as "the Further Information"). Such Further
Information was necessitated by design changes required by the first named
respondent
in relation to the area to be dredged but was based upon the
accuracy and reliability of the Report."
(Particulars of design changes and additional information were added).
Paragraph 11.
"11. The second and third named respondents in trade or commerce in the
course of the businesses referred to in 5. above in or
about late August
and/or early September 1980 orally represented to the applicant that the
additional information relating to quantities
and materials to be dredged
referred to in 10. above was accurate."
(Particulars of this paragraph stated that the representations were made at
meetings held on 28th August and 3rd September 1982 at
the offices of Broken
Hill Proprietary Company Ltd. in Perth. Minutes of those meetings and
correspondence in relation to those minutes
were tendered by Woodside without
objection. The minutes record discussion regarding a change in dredging
requirements due to relocation
of the proposed channel and amendment of the
terms of the proposed written contract. There was also discussion regarding
quantities
of rock and other materials to be dredged).
Paragraph 12.
"12. The first named respondent on or about 11 September 1980, by and
through its agent Broken Hill Proprietary Company Ltd. represented
to the
applicant in trade or commerce in the course of the business referred to in 4.
above that the additional information relating
to quantities and materials to
be dredged referred to in 10. above was accurate.
PARTICULARSCompany Limited to the applicant dated 11 September, 1980."
Such representation was contained in a letter from Broken Hill Proprietary
"13. On or about 7th October, 1980 the applicant, relying upon the
accuracy and reliability of the information contained in the
Report, the
Further Information referred to in paragraph 10. above and the representations
referred to in 11. and 12. above entered
into an agreement in writing with the
first named respondent ("the Agreement") binding itself to carry out the Work
by the use of
certain methods, plant and equipment as more fully described in
the "Agreement in consideration of the first named respondent making
payments
to the applicant in accordance with the terms of the said contract totalling
$5,498,097 and in further consideration of
the first named respondent
performing and complying with all requirements placed upon it by the said
contract."
(Particulars identified the Agreement and related documents which were
tendered in evidence by Woodside without objection are hereafter
referred to
as "the contract documents". Clause 11 of the contract is as follows:-
"CONTRACTOR TO INFORM HIMSELFof the Principal, to have -
11.1 CONTRACTOR TO EXAMINE DOCUMENTS, SITE AND CONDITIONS
The Contractor shall be deemed, notwithstanding any negligence of the part
11.1.3 examined the Site and its surroundings; andbelow the surface of the Site, and the climatic conditions at and near the Site; and
"11.1.4 informed himself of all relevant physical conditions upon and
"14. Between October 1980 and December 1981 the applicant performed the
Works as specified in the Agreement."
Paragraph 15.
"15. In so supplying and distributing the Report as mentioned in paragraph
9 above and in supplying the Further Information referred
to in paragraph 10
above, the first, second and third named respondents engaged in conduct in
trade or commerce which was misleading
or deceptive or likely to mislead or
deceive in that the information contained therein was materially inaccurate
and materially unreliable
in the following respects:
"(a) notwithstanding that it was an express and implied objective of the
Report to identify granophyre boulders, the Report failed
to identify such
material as being present in the area to be dredged. Such granophyre boulders
were so present and were distributed
at intervals throughout the said area."
(Particulars specify alleged inaccuracies as to description of rock types,
gravel and other materials on the harbour floor).
Paragraph 16.
"16. Further, the first, second and third named respondents in making the
representations referred to in 11. and 12. above engaged
in conduct in trade
or commerce which was misleading or deceptive or likely to mislead or deceive
in that the said additional information
relating to quantities and materials
to be dredged was inaccurate."
Paragraph 17.
"17. On the basis of the accuracy of the quantities in the Report referred
to in paragraph 15(g) above and upon the accuracy of
the additional quantity
information as part of the Further Information referred to above, the
quantities of materials to be dredged
in the said harbour basin area were
agreed between the representatives of the first named respondent and the
applicant on or about
16th September, "1980 and such agreed quantities formed
a substantial basis upon which the Agreement referred to in paragraph 13
above
was entered and upon which the consideration referred to therein was agreed to
by the applicant. Such agreed quantities are
set out in Table A below. In
fact, the quantities of materials present in the said harbour basin area are
set out in Table B below."
(Tables A and B consisted of quantities of the various materials referred
to).
Paragraph 18.
"18. Further, the first, second and third named respondents in supplying
the Report to the applicant on the basis that it was
a comprehensive site
report engaged in conduct in trade or commerce that was misleading or
deceptive or likely to mislead or deceive
in that they had available to them
at the time of the supply of said Report other information which was relevant
to the future performance
of the work and the submission of tenders and they
failed to make such information available to the applicant."
Paragraph 19.
"19. The other information referred to in paragraph 18 above was that
contained in an investigation for the Phillip Point Supply
Base and Supply
Base Wharf prepared by Soil and Rock Engineering "Pty. Ltd. ("the Soil and
Rock Report") and preliminary drilling
information obtained in March 1979
covering an area near Phillip Point, the results of which were documented in a
document numbered
A2100R-001 ("the March report")."
Paragraph 20.
"20. Such information was different in material respects from, and
inconsistent with the information within the Report in that:"
(Particulars of the differences and inconsistencies follow).
Paragraph 21.
"21. By reason of the conduct referred to in 15 and/or 16 and/or 18 above the applicant has suffered loss and damage in that the costs of performing the Work have far exceeded the considerations provided for and paid under the Agreement and the applicant has lost the profit which it would otherwise have made."
The question of law raised by Woodside is whether the statement of claim
alleges facts which, if proved, are capable of establishing
a contravention by
Woodside of S.52 of the Act. Counsel for Woodside presented a written document
in which the following points of law were suggested for consideration
in the
resolution of the question of law previously stated. They are as follows:
"1. The conduct with which section 52 is concerned is conduct which
misleads or deceives or is likely to mislead or deceive members of the public
in their capacity as
consumers of goods or services.
2. Where one person, acting in good faith and without negligence, and
without himself making any promise as to its correctness
or completeness,
communicates to a second person information he has obtained from a third
person, describing it as such, then the
first person does not "engage in
conduct that is misleading or deceptive" even though the information be
incorrect or incomplete.
3. Alternatively to 2, the proposition there set forth applies where:the matter;
a) the information is of a technical nature;
b) the first person himself professes no expertise or special knowledge in
c) the third person is an expert in the matter;must rely on his own judgment in any use that he makes of it.
d) the information is supplied on the express basis that the recipient
(i) in trade or commerce; orreference to an amendment to paragraph 16 of the defence. That paragraph, as amended, is in the following terms:-
(ii) that was misleading or deceptive or likely to mislead or deceive."
The consulting engineers expressed the points of law to be decided by
The contentions of all counsel naturally centred around the interpretation of S.52 of the Act and the starting point was the decision in the High Court of Hornsby Building Information Centre Proprietary Limited and Anor v. Sydney Building Information Centre Limited (1977 -78) [1978] HCA 11; 140 C.L.R. 216, ("the Hornsby Building Information Centre case"), where the now well known judgment of Stephen, J. was adopted by Barwick, C.J. as to such reasons as supported the conclusions he reached and by Jacobs, J. as to both reasons and judgment. Aickin, J. agreed with the reasons for judgment of the Chief Justice and Murphy, J. delivered a judgment of his own without reference to that of Stephen, J. The facts to be considered need not be reproduced in detail. The Australian Industrial Court had held that an interim injunction prohibiting the name Hornsby Building Information Centre should go at the suit of Sydney Building Information Centre. Stephen, J. held that words descriptive of the nature of the business could not be held to be misleading within the meaning of S.52. Barwick, C.J. and Murphy, J. held to the same effect.
On a narrow view that was the ratio decidendi and all other expressions of opinion were obiter dicta. However, a less narrow view would include in the ratio the rejection of an argument that S.52 only applied to conduct as between a supplier of goods or services and a recipient of those goods or services. I use the word "recipient" as a neutral term to avoid the use of the word "consumer". Much of the reasoning in that case revolved around the definition of "consumer" in section 4(3) of the Act, as it then was, and its relevance in the interpretation of S.52 of the Act. The motivation of the moving party for injunction or other relief was held to be irrelevant and that benefit to the applicant does not destroy the right to enforce the Act pursuant to S.80 of it.
I find difficulty in understanding the reasoning of Stephen, J. (and I say
so, of course, with the greatest respect), particularly
the learned judge's
comments on the relevance and nature of the definition of "consumer" in S.4(3)
of the Act, as it then was, and the irrelevance of the heading "Consumer
Protection" in the interpretation of S.52. The definition in S.4(3) was
described as a "quasi-definition" and the words of S.52 described as
"unambiguous" and which should not be given some "unnaturally confined
meaning" because of the heading to Part V. His Honour then went on to adopt
what was said by Latham, C. J. in Silk Bros Pty. Ltd. v. State Electricity
Commission (Victoria)
[1943] HCA 2; (1943) 67 C.L.R. 1 at p. 16. That case was concerned
with the effect of a clear section that certain specifically identified
regulations were repealed.
One of the decisions cited by Latham, C. J. in Silk
Bros. case (supra) namely, In re Commercial Bank of Australia Ltd. (1893) 19
V.L.R. 333 at p. 375 was that:-
". . . headings in a statute . . . can be taken into consideration . . .
and may sometimes be of service in determining the scope
of a provision . .
."
Although the words of S.52 are "unambiguous", it appears to me that the scope
of their application is left unclear unless some regard is had to the mischief
sought to be remedied by the Act. At p. 226, Stephen, J. adverted to the
novelty of the jurisdiction of State courts to hear passing-off
actions being
conferred on the Australian Industrial Court and went on to say:-
"However, this is, I think, but a consequence of the very direct
relationship which necessarily exists between the deception of
consumers in
the course of trade and the injury caused by the unfair practices of a trade
rival. Such deception will quite often
be the means adopted to produce that
injury. Legislation which aims at the prevention of the former will at the
same time tend to
put an end to the latter."
It is not clear who are the consumers being referred to, but having regard to what was previously said in the judgment, I assume that the consumers there referred to are of a wider class than those referred to in S.4(3). The use of the phrase "unfair practices" reproduces a sub-heading in Part V, but no direct reference is made to that sub-heading giving guidance in the interpretation of S.52.
There have been a number of expressions of opinion by members of the High
Court and this court which bear upon what is aimed at
by the legislature in
S.52 of the Act. In The Queen v. Federal Court of Australia ex parte
Pilkington A.C.I. (Operations) Pty. Limited [1978] HCA 60; (1978) 142 C.L.R. 113, the
jurisdiction of this court to hear proceedings instituted by competitors who
were not consumers was challenged and such challenge
rejected. At p. 128,
Mason, J. (with whom Jacobs, J. expressed agreement) said that he agreed with
the observations made by Bowen,
C.J. in World Series Cricket Pty. Limited v.
Parish (1977) 16 A.L.R. 181 at pp. 186-187 where the Chief Judge said this:-
"Even where the application is brought by a rival competitor seeking
redress of damage to his business caused by the allegedly
unfair and illegal
practices of the respondent, the application, though it vindicates or protects
the private interests of the competitor,
at the same time secures the public
interest of consumer protection. Though, for example, the complaint under Pt V
of the Act in some cases closely resembles an action for passing off or trade
libel, it is nevertheless an action to protect the
consuming public from being
misled or misinformed. For competition between rival traders properly to be
promoted, it is necessary
that the relevant market is kept adequately informed
about the goods or services available for purchase, and is not misled by
deceptive
trade practices."
Mason, J. also noted the observations of Franki, J. at p. 196 of that report
and Brennan,J. at p. 199. The significant words, for
the purposes of this
case, are "to protect the consuming public".
In The Queen v. Credit Tribunal ex parte General Motors Acceptance
Corporation [1977] HCA 34; (1977) 137 C.L.R. 545 at 561 in dealing with the word
"misleading", Mason, J. said:-
"Its meaning therefore is apt to be influenced, indeed decisively
influenced, by the context in which it is found. Here the setting
in which
S.52(1) appears is shown by the headings 'Part V - Consumer Protection' and
'Division 1 - Unfair Practices'. In this context the prohibition contained in
the sub-section emerges
as an important general prohibition against a
corporation in the course of trade or commerce engaged in a form of conduct, a
trade
practice, which is unfair."
Although Mason, J. found the heading and sub-heading of assistance in determining the meaning of "misleading", I am of the view that that heading and sub-heading is also of assistance in determining the scope of the section as a whole. Sub-section 2 of S.52 appears to me to be a direction against courts looking for similarities to conduct specified in the other sections of that Division before applying S.52(1) to cover "unfair practices" which bear no factual similarity.
Gibbs, C.J. in Parkdale Custom Built Furniture Pty. Limited v. Puxu Pty.
Limited (1982) 56 A.L.J.R. 714 at p. 717, in considering
whether certain
conduct was misleading within the meaning of S.52 said:-
"Section 52 does not expressly state what persons or class of persons
should be considered as the possible victims for the purpose of deciding
whether conduct is misleading or deceptive or likely to mislead or deceive. It
seems clear enough that consideration must be given
to the class of consumers
likely to be affected by the conduct."
In the same case at p. 719, referring to S.52(1), Mason, J. said:-
"It is not enough that conduct damages a rival trader; it must mislead or
deceive or be likely to mislead or deceive members of
the public in their
capacity as consumers."
These expressions of opinion afford guidance as to the ambit of S.52(1). It appears to me that it is clear that when looked at as a whole, the conduct in question must contain an element of unfairness when judged by a high standard of business morality.
Although it is clear that an intention to mislead need not be proved, there must be a degree of unfairness when the transaction is looked at, including the relative bargaining positions of the parties in contractual situations.
Turning to the words "trade or commerce", it is sufficient to say that both words import regularity of activity. S. 52(1) would apply to the selling of furniture by a wholesaler, but need not apply if it sold one of its warehouses. Nice questions will no doubt arise as to what is included in the "trade or commerce" of a corporation, but the instant case raises no problem. Regularity is absent; the subject matter of the contract could be described as unique unless one assumes that dredging operations in harbours are standard type operations.
The features of the facts alleged in this case which lead me to hold that S.52 is not breached are the absolutely private nature of the negotiations leading to the contract, the lack of any circumstances which could be described as "an unfair practice" according to good business morality and the lack of any allegation of fraud, negligence or deceit. An innacurate report may be misleading or likely to mislead, but the other elements required are lacking.
Further, "protection" of consumers postulates some need for protection. Corporations such as Westham that can negotiate and execute contracts for a price of five and a half million dollars do not readily spring to mind as the "possible victims" referred to by Gibbs, C.J. in the Parkdale case (supra).
There is much force in Woodside's submissions as to what the statement of claim fails to allege: counsel listed fraud, deceit and negligent misstatement. Additionally, no contracting party could avoid liability for breach of S.52(1) by such clauses as clause 11 set out above as an addendum to paragraph 13 of the statement of claim, however impeccable the fairness of its contract. If the law is as submitted by Westham, there is great danger in supplying a report independently made; a contractual term putting the onus of making adequate enquiries about matters in respect of which one party is inexpert or lacks basic knowledge is of no value whatsoever.
In any event, as between Woodside and Westham, looking at the transactions as a whole, Woodside looks more like the consumer than does Westham, in the sense that the contract basically concerns the supply by Westham of dredging services to Woodside.
However widely "consumer" is defined, Westham's contention that it is a "consumer" because it was the recipient of a report in the circumstances alleged suggests that, in the transaction, there are two consumers.
As between the consulting engineers and Westham, there is no allegation of a contractual relationship; nor that they were agents of Woodside. They knew the purpose for which their report was compiled and I fail to see how Westham can, in the circumstances, be alleged to become consumers of services provided to someone else. Because of the definition of "services" in S.4 of the Act, I see no merit in the defences set out in sub-paragraphs (i), (iii) and (v) of paragraph 16 of the defences. Professional advice or service, provided the other necessary ingredients are present, may lead to breach of S.52.
The result that S.52 has no application in the instant case, can be reached
by the different route of paying regard to the legislative history of the
Trade Practices Act as it now stands. The Australian Industrial Court decided
the Hornsby Building Information Centre case (supra) in 1975. The High
Court
judgment on the appeal was delivered in 1978 and, therefore, could not have
the attention of the draughtsmen of the 1976 amendment.
Nor could the High
Court take into account the 1976 amendment or any extrinsic aids to statutory
interpretation which were provided
to that amendment. The relevant parts of
S.4B of the Act, inserted by that amendment, are in the following terms:-
"(1) For the purposes of this Act, unless the contrary intention appears
--
(a) a person shall be taken to have acquired particular goods as a
consumer if, and only if --
"(i) the price of the goods did not exceed the prescribed amount; ora kind ordinarily acquired for personal, domestic or household use or consumption,
(ii) where that price exceeded the prescribed amount -- the goods were of
(i) the price of the services did not exceed the prescribed amount; orof a kind ordinarily acquired for personal, domestic or household use or consumption.
(ii) where that price exceeded the prescribed amount -- the services were
(2) For the purposes of sub-section (1) --for the purposes of this paragraph, that greater amount;
(a) the prescribed amount is $15,000 or, if a greater amount is prescribed
The law as to when regard may be had to committee reports as an aid to interpretation is adequately summarised in Pearce: Statutory Interpretation (1981) at paragraph 81 p. 64.
The amendments to S.4(3) were the result of a report by the Trade Practices
Act Review Committee (the Swanson Report) to the Minister for Business and
Consumer Affairs in August of 1976 and at p.63 of that report,
paragraphs 9.38
to 9.45 recommend amendment of the definition of "consumer". The amendment to
the definition of "consumer" in S.4B is in line with the recommendations made
by that Committee. In paragraph 9.38, the Committee states:-
"The definition of 'consumer' is central to much of Part V of the Act --
particularly Division 2."
This assumption as to the significance of the old definition in S.4(3) is
contrary to the decision in the Hornsby Building Information Centre case
(supra). Nevertheless, taken as a basis on which to work
to recommend reform
of it, this assumption loses no force when the task is to seek out the
mischief to be struck down. There follows,
in the report, discussion of the
submissions put to it, and the reasons for recommending a ceiling of $15,000
on transactions regarding
goods or services other than those for personal,
domestic or household use or consumption.
Applying the 1976 definition of "consumer" to the instant case, it clearly excludes the dealings between Woodside and Westham. Even if S.4B remains a quasidefinition, it clearly excludes certain transactions where the price of goods or services exceed $15,000. As to the case against the consulting engineers, the definition contemplates payment by the consumer for the services and, of course, no such allegation is made.
I am, of course, aware that there have been a number of reported decisions where advertising, equivalent conduct to passing-off and other misleading practices, or practices likely to mislead have been held to be in contravention of S.52. In those cases, the conduct relied upon was public. They involved an invitation to anyone who was prepared to, to buy or receive services. Not one was concerned with a privately negotiated contract where the offer to enter into negotiations to contract was not publicly made or indiscriminating as to who came forward.
In the result I hold that the defences raised by the first respondent as above set out are a valid answer in law to the statement of claim. I hold, also, that the defences raised by the second and third respondents in sub-paragraphs (ii) and (iv) of paragraph 16 of their amended defence are valid answers in law to the statement of claim.
AustLII:
Copyright Policy
|
Disclaimers
|
Privacy Policy
|
Feedback
URL: http://www.austlii.edu.au/au/cases/cth/FCA/1983/30.html