Hearn v O'Rourke [2002] FCA 1179 (20 September 2002)

Last Updated: 20 September 2002

FEDERAL COURT OF AUSTRALIA

Hearn v O'Rourke [2002] FCA 1179

PRACTICE AND PROCEDURE - whether statement of claim ought to be struck out - whether facts pleaded and particularised give rise to a contravention of s52 of the Trade Practices Act 1974 (Cth).

TRADE PRACTICES - whether conduct alleged took place in trade or commerce - whether conduct alleged of a trading or commercial character - where statements made in context of a proposed documentary - whether connexion between conduct alleged in statement of claim and respondents commercial activities in making and distributing films sufficient - whether correct to have regard to respondents' wider enterprise to gain necessary commercial element - where no commercial relationship between applicants and respondents.

STATUTES

Trade Practices Act 1974 (Cth) s 52

CASES

Barto v GPR Management Services Pty Limited (1991) 33 FCR 389 Not Followed

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

Dataflow Computer Services Pty Ltd v Goodman (1999) 168 ALR 169 Cited

Martin v Tasmania Development and Resources (1999) 163 ALR 79 Cited

TACCARA JAYNE HEARN AND KELLIE ANNE ALLARDICE V DENNIS O'ROURKE AND CAMERAWORK PTY LTD.

Q90 OF 2002

KIEFEL J

20 SEPTEMBER 2002

BRISBANE

IN THE FEDERAL COURT OF AUSTRALIA
QUEENSLAND DISTRICT REGISTRY	Q90 OF 2002

BETWEEN:	TACCARA JAYNE HEARN FIRST APPLICANT KELLIE ANNE ALLARDICE SECOND APPLICANT
AND:	DENNIS O'ROURKE FIRST RESPONDENT CAMERAWORK PTY LTD (ACN 002 277 296) SECOND RESPONDENT

JUDGE:	KIEFEL J
DATE OF ORDER:	20 SEPTEMBER 2002
WHERE MADE:	BRISBANE

THE COURT ORDERS THAT:

1. The statement of claim be struck out.

2. The applicants pay the respondents' costs on the motion.

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	Q90 OF 2002

BETWEEN:	TACCARA JAYNE HEARN FIRST APPLICANT KELLIE ANNE ALLARDICE SECOND APPLICANT
AND:	DENNIS O'ROURKE FIRST RESPONDENT CAMERAWORK PTY LTD (ACN 002 277 296) SECOND RESPONDENT

JUDGE:	KIEFEL J
DATE:	20 SEPTEMBER 2002
PLACE:	BRISBANE

REASONS FOR JUDGMENT

1 The applicants seek damages and other relief for contraventions of s 52 Trade Practices Act 1974 (Cth). The respondents contend that the statement of claim should be struck out as the conduct alleged did not take place "in trade or commerce" as s 52 requires.

2 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 first 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 The respondents submit that whilst there is a connexion between the conduct alleged in the statement of claim, and the respondent's commercial activities in making and distributing films, this is not sufficient. The phrase "in trade or commerce" in s 52 is restricted in its operation to conduct which is itself an aspect or element of activities or transactions which, of their nature, bear a trading or commercial character: Concrete Constructions (NSW) Pty Ltd v Nelson [1990] HCA 17; (1990) 169 CLR 594, 602-603. It does not extend to conduct which merely occurred in the course of carrying on an activity or carrying out a transaction of a trading or commercial character. The respondents' point to the lack of any commercial dealing or relationship between them and the applicants. Although it is not determinative of these matters, no payment was made to them. Even if they had been rewarded for their services, this would not be sufficient. The contract would be one of employment. It would not provide the necessary context of trade or commerce. The respondents contend that the only trade or commercial dealings on their part occurs at the point where the completed film is promoted and distributed.

4 The respondents submitted that the context in which the alleged representations were made could be likened to the creation of a product. The respondent drew an analogy with the construction of a building pursuant to a building contract. The majority in Concrete Constructions held that, without more, such activities were not in trade or commerce. The respondents also likened the activities, in relation to the applicants to the giving of directions to actors and cameramen and others employed or engaged in making the film. In summary, the dealings between the first respondent and each of the applicants and their parent did not bear a trading or commercial character (Concrete Constructions, 604).

5 The applicants submitted that the position was not so clear. The line between conduct being "in" or "in connection with" is a fine one: Dataflow Computer Services Pty Ltd v Goodman (1999) 168 ALR 169, 173 [19] (Hely J). If the applicants' case is arguable, the matter should proceed to trial. Although some mention was made of additional facts which might be adduced at trial, the applicants did not rest their submissions upon the need for their ascertainment. It was not obvious to me what other facts might be of assistance in resolving this question and none were identified.

6 "In trade or commerce" has been equated with "as part of trade or commerce", the applicants point out (Toohey J, Concrete Constructions, 614). The trade or commercial context is the production of films for profit and furthering the respondents' business in that regard. It follows that activities carried out for the purpose of securing the subject matter of the film must be seen as an "aspect or element" of the film-making activities. Those activities bear a trading or commercial character, just as advertising a product can be said to be an aspect of selling it. The transactions with the applicants were engaged in "as part of" the respondents' trade or commerce. If they had engaged the applicants to appear for remuneration, that conduct would have been "in trade or commerce", it is submitted. That the applicants were volunteers should not make a real difference.

7 The conduct in question in Concrete Constructions was the giving of inaccurate information by one employee to another in the course of carrying on the building activities of a commercial builder (603). The majority held that, as a matter of language, the prohibition in s 52 could be construed as encompassing conduct in the course 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 ..." (602-3).

8 The conduct in that case fell into that category. The reference to "in trade or commerce" in s 52 should not be construed in that way. It should be taken to refer:

"...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] HCA 7; (1948) 76 CLR 1, 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." (603).

9 Their Honours continued:

"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." (604)

10 The example of promotional activities was given. In some areas the dividing line between conduct which is, and conduct which is not "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."(604). Further examples were gone into. The driving of a truck or the construction of a building were not, without more, trade or commerce and engaging 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 (604). On the other hand, driving a truck with a competitor's name on it so as to mislead a customer, or concealing a defect from a building may constitute conduct "in trade or commerce". Turning to the position of an employee, their Honours observed that a misleading statement by one employer of a company to another might come within the section if it was made "in the course of, or for the purposes of, some trading or commercial dealing between the corporation and the particular employee"(604). The facts in Concrete Constructions involved employees acting in the course of their ordinary activities in and about the construction of a building.

11 Toohey J (614) was also of the opinion that even if one took a broad view of s 52(1), "in" clearly operates by way of limitation. The question is not whether the conduct was engaged in connection with or in relation to trade or commerce. It must have been in trade or commerce. His Honour added that the phrase "as part of trade or commerce" comes close to what is intended. Brennan J did not consider there was a need to read down s 52 if one accepted that the section only prohibits conduct which misleads or deceives, or is likely to mislead or deceive, a person in their capacity as a consumer (606). McHugh J's reasoning was to a similar effect (621).

12 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.

13 The applicants, in submitting that the provision of their services to the respondents' business provided a commercial setting, did not place direct reliance upon Barto v GPR Management Services Pty Limited (1991) 33 FCR 389, 395. The correctness of that decision was raised in the respondents' submissions. Wilcox J there held that the conduct of a corporation which occurs in the course of negotiations with a prospective employee in respect of that person's employment contract is conduct capable of falling within s 52. In Martin v Tasmania Development and Resources (1999) 163 ALR 79, 98 Heerey J expressed respectful disagreement with that view. I am also of that view. Without more there is no trade or commercial activity being undertaken.

14 The statement of claim will be struck out with costs.

I certify that the preceding fourteen (14) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Kiefel.

Associate:

Dated: 20 September 2002

Counsel for the Applicant:	Mr R Perry
Solicitor for the Applicant:	Drakopaulos Black
Counsel for the Respondent:	Mr W Sofronoff QC with Mr D O'Gorman
Solicitor for the Respondent:	Pamela Coward & Associates
Date of Hearing:	16 September 2002
Date of Judgment:	20 September 2002