Hearn v O'Rourke [2003] FCAFC 78 (2 May 2003)

Last Updated: 2 May 2003

FEDERAL COURT OF AUSTRALIA

Hearn v O'Rourke [2003] FCAFC 78

PROCEDURE - whether statement of claim should be struck out - whether pleaded and particularised facts support a contravention of s 52 Trade Practices Act 1974 (Cth).

TRADE PRACTICES - whether misleading and deceptive conduct - whether likely to mislead or deceive - whether alleged conduct was in trade or commerce - whether should have regard to overall commercial purpose and activities done incidental to making of documentary - whether should only have regard to aspect or element of activities or transactions that bears trading or commercial nature - whether correct to focus on conduct in question or range of activities engaged in - where no commercial relationship between parties.

Trade Practices Act 1974 (Cth) ss 51A, 52

Federal Court Rules O 29 r 2(a)

Concrete Constructions (NSW) Pty Ltd v Nelson [1990] HCA 17; (1990) 169 CLR 594 applied

Dataflow Computer Services Pty Ltd v Goodman [1999] FCA 1625; (1999) 168 ALR 169 cited

Dey v Victorian Railways Commissioners [1949] HCA 1; (1949) 78 CLR 62 considered

Federal Commissioner of Taxation v Whitfords Beach Pty Ltd [1982] HCA 8; (1982) 150 CLR 355 cited

Tobacco Institute of Australia Limited v Australian Federation of Consumer Organisations Inc [1992] FCA 630; (1992) 38 FCR 1 discussed

Barto v GPR Management Services Pty Limited & Anor [1991] FCA 659; (1991) 33 FCR 389 cited

Martin v Tasmania Development and Resources [1999] FCA 593; (1999) 163 ALR 79 cited

Sykes & Ors v Reserve Bank of Australia (1998) 88 FCR 511 considered

TACCARA JAYNE HEARN by her next friend Margaret Anne Hearn and KELLIE ANNE ALLARDICE v DENNIS O'ROURKE AND CAMERAWORK PTY LTD (ACN 002 277 296)

Q 166 OF 2002

FINN, DOWSETT & JACOBSON JJ

2 MAY 2003

BRISBANE

IN THE FEDERAL COURT OF AUSTRALIA
QUEENSLAND DISTRICT REGISTRY	Q166 OF 2002

ON APPEAL FROM A JUDGE OF THE FEDERAL COURT OF AUSTRALIA

BETWEEN:	TACCARA JAYNE HEARN by her next friend Margaret Anne Hearn FIRST APPLICANT KELLIE ANNE ALLARDICE SECOND APPLICANT
AND:	DENNIS O'ROURKE FIRST RESPONDENT CAMERAWORK PTY LTD (ACN 002 277 296) SECOND RESPONDENT
JUDGES:	FINN, DOWSETT & JACOBSON JJ
DATE OF ORDER:	2 MAY 2003
WHERE MADE:	BRISBANE

THE COURT ORDERS THAT:

1. The appeal be allowed with costs.

2. The matter be remitted to the primary judge for determination.

Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA
QUEENSLAND DISTRICT REGISTRY	Q166 OF 2002

ON APPEAL FROM A JUDGE OF THE FEDERAL COURT OF AUSTRALIA

BETWEEN:	TACCARA JAYNE HEARN by her next friend Margaret Anne Hearn FIRST APPLICANT KELLIE ANNE ALLARDICE SECOND APPLICANT
AND:	DENNIS O'ROURKE FIRST RESPONDENT CAMERAWORK PTY LTD (ACN 002 277 296) SECOND RESPONDENT

JUDGES:	FINN, DOWSETT & JACOBSON JJ
DATE:	2 MAY 2003
PLACE:	BRISBANE

REASONS FOR JUDGMENT

FINN & JACOBSON JJ:

1 Leave to appeal in this proceeding ought be granted for the reasons given by Dowsett J. The appeal itself raised a narrow and largely factual question which is to be resolved in light of the decision of the High Court in Concrete Constructions (NSW) Pty Ltd v Nelson [1990] HCA 17; (1990) 169 CLR 594. The claims made by the applicants allege that conduct engaged in by the two respondents was in contravention of s 52 of the Trade Practices Act 1974 (Cth). The question raised in this appeal (and which was decided by the primary judge adversely to the applicants on a motion to have their Statement of Claim struck out as not disclosing any cause of action), is whether the conduct complained of was engaged in "in trade or commerce".

The Primary Judge's Decision

2 It is sufficient for present purposes simply to restate her Honour's description of the factual setting as pleaded:

"The facts relevant to a consideration of this question are not in dispute. The first respondent was a film director and the second respondent a company, of which the first respondent was a director, which produced films and documentaries for profit. The respondents made the film "Cunnamulla" in 1998 and 1999. Each of the first and second applicants took part in the film and were interviewed by the first respondent without an adult present. The conduct complained of is alleged to have occurred in bringing that about. The applicants were then aged 13 and 15 years respectively. It is alleged that the first respondent falsely represented to the first applicant and her mother that he wished to document her involvement in a contest called the "Miss Maid Contest". To the second applicant's father the respondent is alleged to have said that he wished to obtain her views on whether there was racism in the town. These statements were made in the context of a proposed documentary he said would be made about life in Cunnamulla. The first respondent is alleged to have sought an interview with the applicants alone. He is alleged to have given assurances that he would not speak to them about matters other than those identified. Permission to film the girls and interview them was given by the mother of the first applicant and the father of the second applicant on the basis of these assurances. It is alleged that they were deceived. The representations were false. The first respondent intended to speak to each of the applicants about the first applicant's sexual activities, as he in fact did."

3 It should be said as well that several matters appeared to have been accepted at the hearing of the strike out motion, most notably, (i) that the first respondent's conduct in the matter occurred in the course of the second respondent's production of a film for profit; and (ii) that not only was a documentary film made and released but that it contained interviews with both applicants. However, no additional facts were identified at the hearing which, if adduced at trial, might have been of assistance in resolving whether the conduct alleged was "in trade or commerce". Finally, the respondents in their Defence have admitted that a parent of each of the applicants consented to their respective child being interviewed by the first respondent.

4 The primary judge acknowledged that there could be a "fine line" between conduct that was "in" trade or commerce and that which was merely "in connection with" trade or commerce: Dataflow Computer Services Pty Ltd v Goodman [1999] FCA 1625; (1999) 168 ALR 169 at 173. Her Honour referred at some length, but unexceptionally, to the principles stated by the majority of the High Court, as also by Toohey J, in Concrete Constructions as to the scope and application of the "in trade or commerce" proviso to s 52 of the Trade Practices Act. In light of those principles her Honour observed:

"It is necessary then to have regard to the conduct of the respondents which was directed to the applicant and the activity or activities of which it forms part. It is not correct to have regard to the respondents' wider enterprise in order to gain the necessary commercial element. The conduct consisted of statements made in order to interview the applicants. The context in which they occurred was the respondents making of a documentary-style film. It was the respondents' business to make films, but the activity undertaken in connexion with the making of the statements did not bear a commercial character and there was no commercial relationship between the applicants and the respondents. As Concrete Constructions explains, that does not mean that a statement made at this point in the respondents' activities could never be made in trade or commerce. If, for example, a misleading statement was made by the respondents about the making of the film in order to obtain promotional publicity which might affect potential purchasers or distributors, this might qualify. Critically though, the representations would then bear a commercial character."

The Present Appeal

5 The short issue in this appeal is whether the primary judge correctly characterised "the conduct of the respondents which was directed at the applicants and the activity or activities of which it forms part". In our view, her Honour did not and in so doing misapplied Concrete Constructions.

6 In his reasons Dowsett J has set out at length the principal passage in the majority judgment in Concrete Constructions that explains the scope and application of the "in trade or commerce" proviso to s 52. We will not repeat it here. It is sufficient to refer only to one extract of it. It is (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. 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."

7 The majority went on to illustrate the matter in the following way:

"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"."

8 The impugned representations are not to be characterised as having been made in trade or commerce simply because they were made in the course of the respondents making of a documentary film. For them to have that character they had to be made in dealings with the applicants and their respective parents in the course of an activity which, of its nature, bears a trading or commercial character.

9 We should emphasise in what follows that we are mindful that this question arises in a strike out setting with the consequence that the "case must be very clear indeed to justify the summary intervention of the court": Dey v Victorian Railways Commissioners [1949] HCA 1; (1949) 78 CLR 62 at 91. It needs to be said at the outset that the Statement of Claim borders on the unduly uninformative. Nonetheless, it could properly be inferred from the facts pleaded and agreed that the conduct engaged in by the first respondent was aimed at securing the participation for particular purposes of both applicants in interviews which would provide primary material for the proposed documentary. As we noted earlier, it was accepted by the parties that the first respondent's conduct in the matter occurred in the course of the second respondent's production of a film for profit.

10 Notwithstanding the silence of the Statement of Claim on the matter, it could again be proper to infer that the activity which the second respondent was undertaking when that conduct was engaged in was the identification of prospective participants in the projected documentary who would provide the material that was likely to be used by the respondents in the documentary they wished to make. There could be no documentary unless appropriate interviews were secured. Securing such interviews, in our view, could properly be said to be central to the trading or commercial activity in which the second respondent was engaged in producing a film for profit. Correspondingly, the conduct engaged in by the first respondent for that purpose could itself be found to be in trade or commerce.

11 In reaching this conclusion we are not suggesting that the relationship of the second respondent with the applicants was a commercial one. To this extent we agree with the conclusions of both the primary judge and Dowsett J. Nonetheless we are satisfied that the conduct impugned could possibly be found to have occurred in a dealing with the applicants which was integral to an activity of the second respondent which was itself of a commercial character.

12 For our own part we do not find the analogy between the making of a film and the construction of a building for the purposes of sale a helpful one. The particular surroundings to which the words "trade and commerce" have to adapt themselves: Federal Commissioner of Taxation v Whitfords Beach Pty Ltd [1982] HCA 8; (1982) 150 CLR 355 at 378-379; are those of film production for profit. Considering the matter from the standpoint of the respondents, what they were asking the applicants to provide was the material (a) that would, potentially, furnish some of the visual images and stories of the film to be produced and (b) that would, potentially, give interest and value to the film. The applicants were not being asked to enter a commercial or, for that matter, an employment relationship with the respondents. Nonetheless, we consider it to be reasonably arguable that they were being asked to enter into a relationship which, for the respondents, actually effectuated part of their commercial purpose.

13 We acknowledge that there is an apparent curiosity in our conclusion though it is one countenanced by the majority judgment in Concrete Constructions. The activity in question may be able to be characterised as bearing a trading or commercial character although the particular dealing which carries the activity into effect and in which the impugned conduct occurs does not itself give rise to a commercial relationship.

14 Although we have concluded that this appeal should be allowed, it is appropriate to indicate that the Trade Practices Act claim pleaded faces formidable obstacles for reasons we have not had to consider.

15 We would order the appeal be allowed with costs and the matter be remitted to the primary judge for determination.

I certify that the preceding fifteen (15) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justices Finn and Jacobson JJ.

Associate:

Dated: 2 May 2003

IN THE FEDERAL COURT OF AUSTRALIA
QUEENSLAND DISTRICT REGISTRY	Q 166 OF 2002

ON APPEAL FROM A JUDGE OF THE FEDERAL COURT OF AUSTRALIA

BETWEEN:	TACCARA JAYNE HEARN by her next friend Margaret Anne Hearn FIRST APPLICANT KELLIE ANNE ALLARDICE SECOND APPLICANT
AND:	DENNIS O'ROURKE FIRST RESPONDENT CAMERAWORK PTY LTD (ACN 002 277 296) SECOND RESPONDENT

JUDGES:	FINN, DOWSETT & JACOBSON JJ
DATE:	2 MAY 2003
PLACE:	BRISBANE

REASONS FOR JUDGMENT

DOWSETT J:

16 On 13 July 2001 the applicants commenced proceedings in which they claimed damages from the respondents pursuant to the Trade Practices Act 1974 (Cth) (the "Trade Practices Act"). They also made other claims, but in their statement of claim delivered on 13 July 2001, they raised claims under the Trade Practices Act only. The first applicant sues by her next friend.

17 In October 1998 the first applicant was thirteen years of age; the second applicant was fifteen. The first respondent was at all material times a director of the second respondent and is alleged to have acted on its behalf in all relevant respects. He is a film director; the second respondent is a film producer, producing films for profit. To the extent that these proceedings concern the conduct of the first respondent, it is accepted that such conduct occurred in the course of the second respondent's production of a film for profit.

18 It is alleged that at some time in 1998 the first respondent represented to Margaret Anne Hearn, the first applicant's mother that he:

® was a film-maker;

® was making a documentary concerning Cunnamulla;

® was looking for people to talk to about life in that town;

® wished to feature the first applicant in the documentary because she was an entrant in the "Miss Maid Contest" which was to be conducted in Cunnamulla;

® wished to follow and document her involvement in that contest; and

® would not speak to her about any other matter.

19 The last representation is said to have been implicit in the other statements referred to above. Considerable doubt must surround the first applicant's prospects of establishing such an implication. Subsequently, the first respondent spoke to the first applicant, representing that he:

® was a film-maker;

® was making a documentary about Cunnamulla and the local opal festival; and

® wished to speak to people entering the "Opal Queen Competition" and the "Miss Maid Contest".

20 It is claimed that acting upon the representations made to her, Ms Hearn permitted the first respondent to speak to the first applicant alone, and that the first applicant, relying upon the representations made to her, agreed to participate in such conversation.

21 It is also alleged that in about October 1998 the first respondent spoke to Bruce Allardice, the second applicant's father, representing that he:

® was a film-maker making a documentary film about Cunnamulla;

® proposed to address in such film relations between the black and white communities and what Cunnamulla had to offer;

® wished to interview the second applicant to obtain her views as to problems of racism in Cunnamulla;

® wished to do so without "any other adult" being present; and

® would not speak to her about other matters.

22 It is alleged that Mr Allardice, relying upon those statements, agreed to such interview as did the second applicant.

23 It is pleaded that the first respondent's statements as to his intentions were false, and that he wished to speak to both applicants about their sexual activities and sexual conduct in Cunnamulla. It is asserted that had Ms Hearn or the first applicant been aware of such intention, neither would have agreed to the first respondent's request to interview the first applicant. There is a similar allegation concerning Mr Allardice, the second applicant and the first respondent's request to interview her. The applicants were apparently interviewed by the first respondent and were asked about their sexual activities. The film has been made and released. Curiously, there is no allegation that such interviews or their contents were used in the film. Nonetheless, it appears to be common ground that interviews between the applicants and the first respondent were included. It is said that the first respondent's conduct:

® comprised representations as to future matters within the meaning of s 51A of the Trade Practices Act;

® was in trade or commerce for the purposes of s 52 of that Act; and

® was "false or misleading" or "likely to mislead or deceive", contrary to that section.

The applicants claim that release of the film has caused them humiliation and other suffering for which they claim damages.

24 The respondents moved to strike out the statement of claim upon the ground that the facts pleaded could not establish a contravention of s 52 of the Trade Practices Act because the relevant conduct did not occur in trade or commerce. Kiefel J struck out the statement of claim with costs. The applicants seek leave to appeal against those orders. As the decision at first instance will, if upheld, exclude the applicants from prosecuting their claims, it is appropriate that leave be given. The matter has been fully argued, and it is therefore possible to decide the appeal.

25 Sections 51A and 52 of the Trade Practices Act are as follows:

"51A Interpretation

(1) For the purposes of this Division, where a corporation makes a representation with respect to any future matter (including the doing of, or the refusing to do, any act) and the corporation does not have reasonable grounds for making the representation, the representation shall be taken to be misleading.

(2) For the purposes of the application of subsection (1) in relation to a proceeding concerning a representation made by a corporation with respect to any future matter, the corporation shall, unless it adduces evidence to the contrary, be deemed not to have had reasonable grounds for making the representation.

(3) Subsection (1) shall be deemed not to limit by implication the meaning of a reference in this Division to a misleading representation, a representation that is misleading in a material particular or conduct that is misleading or is likely or liable to mislead.

52 Misleading or deceptive conduct

(1) A corporation shall not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive.

(2) Nothing in the succeeding provisions of this Division shall be taken as limiting by implication the generality of subsection (1)."

26 Resolution of the challenge to the adequacy of the pleading depends upon the reasons of the majority of the High Court in Concrete Constructions (NSW) Pty Ltd v Nelson [1990] HCA 17; (1990) 169 CLR 594. In that case a construction worker alleged that whilst he was employed by a construction company, a foreman of that company told him to remove certain grates from entry points to air-conditioning shafts and that each grate was secured by bolts. It was alleged that this statement was untrue. Whilst the worker was removing one of the grates it gave way, causing him to fall and suffer serious injury. He claimed damages against his employer upon the basis that the foreman's untrue statement constituted conduct which was misleading or deceptive or liable to mislead or deceive, contrary to the provisions of s 52 of the Trade Practices Act. By consent an order was made pursuant to O 29 r 2(a) of the Federal Court Rules that the following question be decided before trial, namely:

"Do the facts pleaded and particularized in the Statement of Claim give rise to a cause of action under the Trade Practices Act 1974?"

27 The preliminary question was initially argued before a single Judge of this Court who answered it in the affirmative. On appeal to the High Court that decision was reversed. The relevant reasoning appears at 602 - 604 (per Mason CJ, Deane, Dawson & Gaudron JJ):

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

The phrase `in trade or commerce' in s. 52 has a restrictive operation. It qualifies the prohibition against engaging in conduct of the specified kind. As a matter of language, a prohibition against engaging in conduct `in trade or commerce' can be construed as encompassing conduct in the course of the myriad of activities which are not, of their nature, of a trading or commercial character but which are undertaken in the course of, or as incidental to, the carrying on of an overall trading or commercial business. If the words `in trade or commerce' in s. 52 are construed in that sense, the provisions of the section would extend, for example, to a case where the misleading or deceptive conduct was a failure by a driver to give the correct handsignal when driving a truck in the course of a corporation's haulage business. It would also extend to a case, such as the present, where the alleged misleading or deceptive conduct consisted of the giving of inaccurate information by one employee to another in the course of carrying on the building activities of a commercial builder. Alternatively, the reference to conduct `in trade or commerce' in s. 52 can be construed as referring only to conduct which is itself an aspect or element of activities or transactions which, of their nature, bear a trading or commercial character. So construed, to borrow and adapt words used by Dixon J. in a different context in Bank of N.S.W. v. The Commonwealth [(1948) [1948] HCA 7; 76 CLR 1 at 381], the words `in trade or commerce' refer to `the central conception' of trade or commerce and not to the `immense field of activities' in which corporations may engage in the course of, or for the purposes of, carrying on some overall trading or commercial business.

As a matter of mere language, the arguments favouring and militating against these alternative constructions of s. 52 are fairly evenly balanced. The scope of the prohibition ... is ... governed not only by `the terms in which it is created' but by `the context in which it is found' ... . In that regard, it is of particular significance that the words `trade' and `commerce' have `about them a chameleon-like hue, readily adapting themselves to their surroundings' ... . Section 52(2) precludes limiting the scope of s. 52(1) by implication drawn from the contents of other provisions of Pt V. Nonetheless, when the section is read in the context provided by other features of the Act, which is `An Act relating to certain Trade Practices', the narrower (i.e. the second) of the alternative constructions of the requirement `in trade or commerce' is the preferable one. Indeed, in the context of Pt V of the Act with its heading `Consumer Protection', it is plain that s. 52 was not intended to extend to all conduct, regardless of its nature, in which a corporation might engage in the course of, or for the purposes of, its overall trading or commercial business. Put differently, the section was not intended to impose, by a side-wind, an overlay of Commonwealth law upon every field of legislative control into which a corporation might stray for the purposes of, or in connection with, carrying on its trading or commercial activities. What the section is concerned with is the conduct of a corporation towards persons, be they consumers or not, with whom it (or those whose interests it represents or is seeking to promote) has or may have dealings in the course of those activities or transactions which, of their nature, bear a trading or commercial character. Such conduct includes, of course, promotional activities in relation to, or for the purposes of, the supply of goods or services to actual or potential consumers, be they identified persons or merely an unidentifiable section of the public. In some areas, the dividing line between what is and what is not conduct `in trade or commerce' may be less clear and may require the identification of what imports a trading or commercial character to an activity which is not, without more, of that character. The point can be illustrated by reference to the examples mentioned above. The driving of a truck for the delivery of goods to a consumer and the construction of a building for another pursuant to a building contract are, no doubt, trade or commerce in so far as the relationship between supplier and actual or potential customer or between builder and building owner is concerned. That being so, to drive a truck with a competitor's name upon it in order to mislead the customer or to conceal a defect in a building for the purpose of deceiving the building owner may well constitute misleading or deceptive conduct `in trade or commerce' for the purposes of s. 52. On the other hand, the mere driving of a truck or construction of a building is not, without more, trade or commerce and to engage in conduct in the course of those activities which is divorced from any relevant actual or potential trading or commercial relationship or dealing will not, of itself, constitute conduct `in trade or commerce' for the purposes of that section. That being so, the giving of a misleading handsignal by the driver of one of its trucks is not, in the relevant sense, conduct by a corporation `in trade or commerce'. Nor, without more, is a misleading statement by one of a building company's own employees to another employee in the course of their ordinary activities. The position might well be different if the misleading statement was made in the course of, or for the purposes of, some trading or commercial dealing between the corporation and the particular employee."

28 The following propositions emerge from the above extract:

® The phrase "in trade or commerce" has a restrictive operation, in the sense that it narrows the operation of s 52.

® The phrase is capable of both a wider and a narrower interpretation.

® The wider interpretation would include "... 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."

® Such an approach would impose an overlay of Commonwealth law upon any area in which a corporation might act in carrying on its trading or commercial activities.

® The second, and narrower construction is that s 52 applies only to conduct "... which is itself an aspect or element of activities or transactions which, of their nature, bear a trading or commercial character."

® The narrower construction is correct.

® The section is concerned with the conduct of a corporation towards persons with whom it has, or may have dealings in the course of its trading activities or transactions which dealings, of their nature, bear a trading or commercial character.

® The dividing line between conduct which is in trade or commerce and conduct which is not may be unclear, in which case it may be necessary to identify the features which import a trading or commercial character to an activity which would not, without more, have that character.

® The mere driving of a truck or construction of a building is not, without more, in trade or commerce.

® To engage in conduct 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 the section.

29 The question is important, given that most corporations exist solely to pursue commercial objectives. The broader approach, rejected by the majority in Concrete Constructions, would result in virtually all of the activities of such a corporation being regulated by s 52. The focus upon conduct "... divorced from any relevant actual or potential trading or commercial relationship or dealing ..." is, I think, of particular importance for present purposes. It demonstrates that the focus must be upon the conduct in question and not upon the range of activities in which a relevant corporation may be engaged. In other words, one does not simply identify the conduct in question, note that the relevant corporation is engaged in commercial activity of some kind, then look for a connection between the two. Because corporations are usually formed to engage in commercial activities, it will rarely be difficult to find such a connection. The correct approach is to determine whether or not the relevant conduct can, according to ordinary usage, be described as having occurred in the course of dealings "...which, of their nature, bear a trading or commercial character". The commercial undertakings of the corporation in question may be relevant to the exercise. However, the more important question will be whether the conduct is of a kind which is usually of a commercial nature.

30 A better understanding of the majority's meaning can be derived from a consideration of the reasons of the other three members of the Court, namely Brennan, Toohey and McHugh JJ. Each of their Honours considered that the protection offered by s 52 extended only to consumers. This conclusion was primarily based upon the heading of Pt V of the Act. It was rejected by the majority. Nonetheless, as I have demonstrated, the majority was concerned to identify the appropriate boundaries of the operation of s 52 and focussed upon the expression "in trade or commerce", giving it the limited meaning to which I have referred. Toohey J also concluded that the relevant conduct had not occurred "in trade or commerce". His Honour's reasons for so concluding appear primarily at 613 - 614 as follows:

"The present appeal proceeded on the assumption, tacit if not express, that the conduct said to have been misleading or deceptive must have been conduct in the trade or commerce of the appellant. No doubt, in most cases the focus will be on the nature of the defendant's business but the section is not so limited. It does not, in terms, refer to the trade or commerce of the particular corporation. It seems unlikely, given the nature of the activities with which Pt V, Div. 1 of the Act is concerned, that it should be necessary to consider closely the character of a corporation's business and in particular to determine whether or not the conduct relied upon by an applicant or plaintiff can fairly be said to be in the trade or commerce of that corporation. Notions of ultra vires can hardly have a part to play in this area of the law. The position of the expression `in trade or commerce' in s. 52(1), and indeed in other sections in Pt V, Div. 1, suggests that it is trade or commerce in general terms with which the statute is concerned.

In my view, s. 52(1) is aimed at conduct in which a corporation engages when that conduct takes place in a situation which fairly answers the description `in trade or commerce'. The words `trade or commerce' are of wide import ... . But their focus is on commercial activity, the providing of goods and services for reward.

...

Even taking such 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 or commerce. It must have been in trade or commerce. While there are dangers in seeking for the meaning of an expression through the substitution of another, the phrase `as part of trade or commerce' does, I think, come close to what is intended. Thus, when the appellant's foreman described the grates as being secured on either side with bolts, that statement must have been made as part of trade or commerce before an action could lie under s. 52(1)."

31 His Honour held that the conduct was not directed at the relevant employee as a consumer but then went on to consider whether or not the conduct was "in trade or commerce", observing:

"Secondly, the appellant's conduct was not in trade or commerce within s. 52(1). If it is the trade or commerce of the appellant with which we are concerned, it may be said that the assurance given by its foreman was in relation to or in respect of that business. But so to conclude does not answer the question whether that assurance was in the trade or commerce of the appellant. In my view it was not, for the conduct was not part of the appellant's trade or commerce, which was that of constructing buildings for others for reward. It was, at most, incidental to that business. Likewise, if the question is whether the assurance was given in trade or commerce generally, the answer must be no. Again, it may have been given in relation to or in respect of trade or commerce in the sense that it was incidental to a commercial activity. But it was not given as part of trade or commerce in any general sense; rather, it was given by an employer to an employee, only for the purpose of the latter carrying out the work for which he had been engaged.

Unless s. 52(1) is confined in the manner suggested in these reasons, it becomes an overriding norm of conduct, a departure from which in any circumstance may give rise to a cause of action. The structure of the Act and its intent, as found in the language used and the legislative history, as well as its judicial history to date, tells strongly against such an operation."

32 In so disposing of the matter Toohey J considered two different approaches to the question of what is "in trade or commerce". It is clear, however, that his Honour preferred the second approach, namely that the conduct must be in trade or commerce generally. This seems to be another way of expressing the majority's view that the relevant conduct will be "in trade or commerce" if it is "... conduct which is itself an aspect or element of activities or transactions which, of their nature, bear a trading or commercial character." Much of the language used in the majority's reasons suggests that their Honours were taking the "narrower" of two available views. It might be thought that Toohey J was claiming to take a "broader", rather than a "narrower" view, suggesting inconsistency between the two positions. However that is not the case. In each case, the approach is to limit the operation of s 52 by reference to its language. Both approaches focus on the conduct in question and ask whether it can be said to have occurred in trade or commerce. Both views may be described as "narrower" because they focus upon the conduct in question and not upon such conduct as part of the activities of the relevant corporation. They may also be described as "broader" because they look at that conduct in the context of trade and commerce generally and not at its significance in the commercial affairs of the corporation.

33 Brennan J disposed of the matter upon the basis that the injured party was not misled or likely to be misled in his capacity as a consumer. However his Honour also said something about the alternative basis for limiting the operation of s 52 preferred by the majority and by Toohey J. At 606 Brennan J said:

"Although I agree with the majority that the phrase `in trade or commerce' qualifies the operation of s. 52, I am respectfully unable to agree that that phrase restricts the operation of s. 52 to conduct which is in itself of a trading or commercial character. The question whether conduct is engaged in `in trade or commerce' cannot be answered by reference to the conduct divorced from the circumstances in which it is engaged in; it can be answered only by reference to the surrounding circumstances. Those are the circumstances `in' which the conduct is engaged in. There is no scalpel of principle which can dissect the conduct out of the activity or transaction `in' which it is embedded. Therefore, in my opinion, if misleading or deceptive conduct occurs in the course of carrying on an activity or carrying out a transaction of a trading or commercial character, the test imported by the phrase `in trade or commerce' is satisfied.

The activity in which the defendant corporation was engaging in this case - building construction for reward - was its business and was clearly a trading activity. It is therefore unnecessary to consider the different meanings which may be attributed to the terms `trade' and `commerce' in differing contexts. The conduct on which the plaintiff relies was engaged in in the course of and as an integral part of the defendant corporation's trade.

There is only one argument of substance which might be thought to justify a reading down of the general language of s. 52 by restricting the meaning of the phrase `in trade or commerce', namely, that s. 52 can hardly have been intended to apply across the broad canvas of activities which reach out to the periphery of trade or commerce."

34 His Honour then went on to explain that his preferred approach, limiting the protection offered by s 52 to consumers, avoided the need to adopt a narrow construction of the expression "in trade or commerce", which approach his Honour obviously considered to be unsatisfactory.

35 The approach taken by McHugh J was similar in most respects to that adopted by Brennan J. His Honour first held that the s 52 protection should be limited to consumers. Having set out reasons for this conclusion his Honour then observed (at 619) that it appeared to be "almost paradoxical" to take a broad view as to the operation of s 52 (by rejecting the notion that it was limited to consumer protection) and, at the same time, to construe narrowly the expression "in trade or commerce". In particular, his Honour observed at 619 - 620:

"If the general words of the section require that it be read as going beyond the protection of consumers, then I can see no reason for confining those words to misleading or deceptive conduct of a trading or commercial character or to conduct in the course of activities which are of the essence of trade or commerce. Rather the general nature of the words would require them to be read as including any misleading or deceptive conduct which occurs in the course of trade or commerce. It would seem most unlikely that the Parliament, ex hypothesi, having gone beyond consumer protection, would intend those general words to proscribe only some kinds of misleading or deceptive conduct occurring in the course of trade or commerce.

Moreover, to interpret the words `in trade or commerce' by reference to the trading or commercial character of the conduct rather than by reference to its relationship with the course of trade or commerce must result in a reduction of protection for consumers, the very persons whose interests Pt V was intended to protect."

36 In summary, in both the reasons of the majority and those of Toohey J, the focus is upon the conduct which is said to be misleading or deceptive and the circumstances in which it occurred. It is not a question of assessing the degree of "proximity" between the relevant conduct and the overall business undertaking of the relevant corporation. That is not to say that the nature of such undertaking may not be relevant to the question of whether or not the conduct in question occurred "in trade or commerce". See for example Tobacco Institute of Australia Limited v Australian Federation of Consumer Organisations Inc [1992] FCA 630; (1992) 38 FCR 1. I will discuss that decision at a later stage.

37 The applicants' argument appears to adopt the views of Brennan J as to the meaning of the expression "in trade or commerce". Indeed, in my view, it is the only available argument which could support their claims. Whatever its intellectual merit, that approach was expressly rejected by the majority in Concrete Constructions and not favoured by Toohey J. Given the rejection by the majority of the argument that s 52 only protects consumers, adoption of the applicants' submission would lead to s 52 having virtually unlimited operation, precisely the result which all members of the High Court in Concrete Constructions were concerned to avoid.

38 Whether one addresses the statements allegedly made by the first respondent prior to the interviews, his alleged intentions or his conduct in interviewing the applicants, it is difficult to conclude that any of these matters constituted conduct in trade or commerce. A request that a person appear in a documentary film or discuss aspects of his or her life to further research for such a film does not seem to have any commercial aspect. To interview such a person goes no further. Of course, negotiations for such involvement might acquire a commercial aspect. The potential interviewee might seek a financial incentive, or such an incentive might be offered. Whether or not that would be sufficient for the purposes of s 52 might depend upon cases such as Barto v GPR Management Services Pty Limited & Anor [1991] FCA 659; (1991) 33 FCR 389 (per Wilcox J) and Martin v Tasmania Development and Resources [1999] FCA 593; (1999) 163 ALR 79 (per Heerey J). However that is not the present position.

39 It may have been intended that the film be produced for profit, and this may have been the outcome. That does not lead to the conclusion that everything which occurred in preparation and distribution of the film occurred in trade or commerce. Various, but not necessarily all aspects of the total undertaking may have had commercial overtones. For example, the acquisition of equipment and film stock and the negotiation of distribution rights may well have occurred in trade or commerce, not because of the relationships between those activities and the overall commercial objective of producing the film for profit, but because such activities may themselves be so described. That description cannot be applied to the dealings between the second respondent on the one hand and the applicants and their parents on the other. I see nothing to justify the view that such relationships, which would not normally be described as commercial, should for present purposes be seen as having that character. It follows that the alleged conduct did not occur in trade or commerce.

40 In the course of argument counsel for the applicants made particular reference to two cases in support of his submissions. Neither offers any support for the applicants' position. The first is Tobacco Institute of Australia Limited v Australian Federation of Consumer Organisations Inc (supra). That case concerned an advertisement published in various newspapers by the appellant company. It dealt with passive smoking. Although it was clear that the company had inserted the advertisements, its purpose in so doing was not clear, or at least there was no direct evidence concerning that matter. The case appears to have been primarily concerned with the availability of inferences from such evidence as there was. The learned trial Judge and all members of the Full Court were willing to infer that the advertisement had been inserted for the purpose of increasing, or preventing decline in the sale of tobacco. Advertisements are, generally speaking, commercial in nature, although it was suggested that these advertisements could have been motivated by a desire to foster public debate or by scientific interest. The members of the Full Court considered the question of whether the company was generally involved in trade or commerce, particularly in promoting the sale of tobacco. In the end, however, their Honours focussed upon the circumstances surrounding the actual conduct in question, namely the publication of the advertisement. The decision was very much dependent upon its own facts. It offers no real support for the applicants' submissions.

41 The second decision is Sykes & Ors v Reserve Bank of Australia (1998) 88 FCR 511. The case concerned the introduction by the Reserve Bank of polymer bank notes. The appellants were engaged in the development, promotion and manufacture of products designed to assist in handling the new notes. The bank had offered them a consultancy agreement pursuant to which they were to visit cash-handling institutions to promote the use of the notes. The bank allegedly made untrue statements as to when the notes would be introduced. The appellants commenced proceedings against the bank, alleging misleading or deceptive conduct in contravention of s 52 of the Trade Practices Act, namely that the bank had made unqualified representations regarding the release dates of the polymer notes without reasonable grounds for making them. The appellants failed at first instance, but on appeal, Heerey J said at 516:

"Trade or commerce

Counsel for the Bank did not seek to argue that in manufacturing and issuing Australian currency (as distinct from currency manufactured for and sold to foreign countries) the Bank was not engaged in trade or commerce. Rather he argued that the statements of the Bank did not bear a trading or commercial character. He said this was so because there was no `relationship' between the Bank and the appellants arising out of the issue of the notes.

This argument is without substance. Dealing in trade or commerce is not limited to that between parties in contractual relations. The evidence disclosed that the Bank was interested in the possible use of Mr Sykes' device and indeed advanced funds for its development and appointed him as a consultant. The Bank had a clear commercial interest in the announcement of the release date to Mr Sykes so that he could assist in the marketing process of the new notes: see Concrete Constructions ... ."

42 Sundberg J agreed with Heerey J on this point. Emmet J did not find it necessary to consider the question. Clearly, the Court looked to the dealings between the appellants and the bank in order to determine whether or not the bank's conduct was in trade or commerce, and not to the commercial nature of the bank's overall operation.

43 I would grant leave to appeal but dismiss the appeal. The applicants/appellants should pay the respondents' costs of the application for leave to appeal and of the appeal.

I certify that the preceding twenty-eight (28) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Dowsett.

Associate:

Dated: 2 May 2003

Counsel for the First and Second Applicants:	Mr R Perry Mr M Jarrett
Solicitor for the First and Second Applicants:	Drakopoulos Black
Counsel for the First and Second Respondents:	Mr P Bick QC Mr D O'Gorman
Solicitor for the Fist and Second Respondents:	Pamela Coward & Associates
Date of Hearing:	20 February 2003
Date of Judgment:	2 May 2003