R v Australian Industrial Court; Ex parte CLM Holdings Pty Ltd [1977] HCA 6; (1977) 136 CLR 235 (10 February 1977)

HIGH COURT OF AUSTRALIA

THE QUEEN v. AUSTRALIAN INDUSTRIAL COURT; Ex parte C.L.M. HOLDINGS PTY. LTD. [1977] HCA 6; (1977) 136 CLR 235

Constitutional Law (Cth)

High Court of Australia
Barwick C.J.(1), Gibbs(2), Stephen(3), Mason(4), Jacobs(5) and Murphy(6) JJ.

CATCHWORDS

Constitutional Law (Cth) - Powers of the Commonwealth Parliament - Corporations power - Consumer protection provisions of trade practices legislation - Provision making a person who contravenes consumer protection provisions guilty of an offence - Different penalties for persons other than bodies corporate and bodies corporate - Validity of provision imposing penalty on persons other than bodies corporate - Persons and conduct affected by Act - Persons not being corporations, as well as corporations, engaged in interstate and overseas trade or commerce, trade or commerce between territories or with a territory or in supply of goods or services to the Commonwealth or Commonwealth authority or instrumentality - Conduct involving the use of postal, telegraphic or telephonic services or taking place in a radio or television broadcast - Validity - Offences - Knowingly being concerned in commission of offence against law of Commonwealth - Whether confined to principal offence capable of being committed by person alleged to have been concerned in commission - Validity - Incidental power - The Constitution (62 & 63 Vict. c. 12), s. 51 (ii.), (v.), (xx.), (xxxix.) - Trade Practices Act 1974 (Cth), ss. 2 (2), 4, 6, 53, 55, 79 - Crimes Act 1914 (Cth), s. 5

HEARING

Sydney, 1976, March 30, 31.
Hobart, 1977, February 10. 10:2:1977
PROHIBITION.

DECISION

1977, February 10.
The following written judgments were delivered: -
BARWICK C.J. I have had the advantage of reading the reasons for judgment analysis of the Trade Practices Act 1974 (Cth) ("the Act"), in so far as concerns the present application and in particular his conclusion as to the use of s. 6 of the Act in producing what is in substance a series of enactments, none of which are inconsistent with each other, and each of which is separately supported by a head or heads of legislative power. It may well be that given circumstances may be governed by more than one such enactment: but that does not betoken invalidity. (at p238)

2. In my opinion s. 79 (a) of itself does not proscribe any particular action or conduct: it merely provides the consequence of a breach of other provisions of the Act. It is an incident of the exercise of the legislative power which supports the substantive provisions prohibiting or requiring conduct the control of which falls within that legislative power. (at p238)

3. There is, in my opinion, no substance in the submission that because a natural person could not commit a breach of a substantive provision such as s. 53 (a), s. 5 of the Crimes Act 1914 (Cth), as amended, cannot extend to make a natural person liable in relation to such an offence. It is clear that it is not necessary for the purposes of s. 5 that the person deemed to have committed the principal offence should have been capable of having done so. (at p238)

4. I agree with the conclusions expressed by my brother Mason and with his reasons therefor. (at p238)

5. In my opinion the order nisi should be discharged. (at p238)

GIBBS J. I have had the advantage of reading the reasons prepared by my brother Mason and, subject to one reservation, am in complete agreement with them. (at p239)

2. I concur with what my brother has said as to the operation which s. 79 (a) of the Trade Practices Act 1974 (Cth) was intended to have in relation to s.55 of that Act when the latter section came into force. But I would not wish it to be thought that it can be implied from what is said on this subject that s. 55 is a valid enactment. That question was not argued and does not fall for decision and I express no opinion upon it. (at p239)

3. I agree that the order nisi should be discharged. (at p239)

STEPHEN J. I have had the advantage of reading and am in full agreement with the reasons for judgment of my brother Mason. I would accordingly discharge the order nisi. (at p239)

MASON J. Upon informations laid by the respondent Alan Albert Wise, ten summonses were issued and served on the prosecutor C.L.M. Holdings Pty. Ltd. ("C.L.M.") and Maclus Pty. Ltd. ("Maclus") charging them with offences against s. 53 (a) of the Trade Practices Act 1974 (Cth) ("the Act"). Upon informations also laid by the respondent Wise, another ten summonses were issued and served on the prosecutrix Muriel Jean Greenslade, a director of C.L.M., charging her, under s. 5 of the Crimes Act 1914 (Cth), as amended, with being knowingly concerned in the commission of the offences by C.L.M. and Maclus. All the summonses were returnable before the Australian Industrial Court. (at p239)

2. The alleged offences arise out of an auction sale of antiques and objets d'art of which C.L.M. was vendor, held at Toowoomba, Queensland on Saturday, 26th April 1975. Eugene Pukallus, evidently an employee of Maclus, acted as auctioneer on behalf of that company. Before the sale copies of an advertising brochure setting out the place and time of sale and the items to be sold were mailed to persons thought to be interested in the sale. This brochure was entitled "Toowoomba Antique & Art Auction". (at p239)

3. Section 53 (a) of the Act provides:

"53. A corporation shall not, in trade or commerce, in
connexion with the supply or possible supply of goods or
services or in connexion with the promotion by any means of
the supply or use of goods or services -
(a) falsely represent that goods or services are of a
particular standard, quality or grade, or that goods are
of a particular style or model."

The offences charged against C.L.M. and Maclus were that they falsely described in the advertising brochures various items for sale. To take summons B. No. 457 as an example, the allegation was that C.L.M. and Maclus -

"being companies incorporated according to the laws of the
State of Queensland, did, in contravention of s. 53 (a) of the
Trade Practices Act, in trade or commerce within Australia in
connection with the promotion by advertising of the supply of
goods, falsely represent that goods were of a particular
quality in that the said C.L.M. HOLDINGS PTY LTD and the
said MACLUS PTY LTD in connection with an auction sale of
goods held on the twenty-sixth day of April 1975 at a place
near Toowoomba in the said State in an advertising brochure
titled 'Toowoomba Antique and Art Auction' and published
by the said companies described the goods listed as Lot 78
therein as 'Five piece French Provincial Louis lounge suite in
beautiful condition. Truly a Collector's piece' whereas the
goods comprising the said Lot 78 did not answer that
description."

The other summonses were in similar terms except in so far as they related to other items for sale and charged in some instances that there was a representation that the goods or services were of a particular standard or grade or that the goods were of a particular standard or model. In each instance Greenslade was charged with being knowingly concerned in the commission of these offences by C.L.M. and Maclus. (at p240)

4. An order nisi for prohibition was made by Stephen J. on the application of C.L.M. and Greenslade ("the prosecutors") on various grounds. Not all these grounds have been pursued in the motion to make the order absolute. (at p240)

5. To appreciate the case that is made out for C.L.M. it is necessary to refer to s. 79. Although s. 53 (a) is the provision in the Act which C.L.M. is alleged to have contravened, it is s. 79 which makes contravention of the provisions of Pt V (which contains s. 53 (a)) an offence against the Act. Section 79 provides:

"79. A person who contravenes a provision of Part V
other than section 52 is guilty of an offence punishable on
conviction -
(a) in the case of a person not being a body corporate - by
a fine not exceeding $10,000 or by imprisonment for a
period not exceeding 6 months; or
(b) in the case of a person being a body corporate - by a
fine not exceeding $50,000."

The submission then made on behalf of C.L.M. is that s. 79 exceeds the legislative power of the Commonwealth Parliament because it seeks to make it an offence on the part of a person, not being a foreign corporation or a trading or financial corporation formed within the limits of the Commonwealth within the meaning of s. 51 (xx.) of the Constitution, to contravene s. 53 (a) otherwise than in the course of interstate or overseas trade or in the course of any other activity over which the Commonwealth Parliament has legislative power. (at p241)

6. The expression "body corporate" in s. 79 is not defined for the purposes of the Act. It is apparent that it has a wider meaning than the word "corporation" which appears in s. 53 (a) and which is defined by s. 4 (1), with ss. 51 (xx.) and 122 of the Constitution very much in mind, so as to mean -

"a body corporate that -
(a) is a foreign corporation;
(b) is a trading corporation formed within the limits of
Australia or is a financial corporation so formed;
(c) is incorporated in a Territory; or
(d) is the holding company of a body corporate of a kind
referred to in paragraph (a), (b) or (c)." (at p241)

7. Section 4 (1) contains the following definitions which are all relevant to an understanding of the meaning of the word "corporation" where it is used in s. 53 (a):

"'financial corporation' means a financial corporation within
the meaning of paragraph 51 (xx) of the Constitution and
includes a body corporate that carries on the business of
banking or insurance as its sole or principal business."
"'foreign corporation' means a foreign corporation within the
meaning of paragraph 51 (xx) of the Constitution and
includes a body corporate that is incorporated in an
external Territory."
"'trading corporation' means a trading corporation within
the meaning of paragraph 51 (xx) of the Constitution."

It is evident then that the expression "body corporate" includes corporations other than corporations of the kind which are included in the statutory definition of "corporation". However, these definitions do not touch the prosecutors' argument which centres upon the proposition that a law making it an offence for persons other than corporations within the meaning of s. 51 (xx.) to contravene the provisions of Pt V, is beyond power. (at p241)

8. The answer to this argument requires a consideration of what I shall call the direct operation of the provisions of the Act and as well a consideration of the extended operation which the Act is given by the complicated provisions of s. 6 (2) and (3) . (at p241)

9. The answer to the prosecutors' submission is that the source of power which supports Pt V other than s. 52 necessarily supports s. 79. With the exception of s. 55 all the provisions of Div. 1 of Pt V are expressly directed to corporations. In form they specifically direct that "a corporation" shall not engage in a particular kind of conduct or activity. It has not been suggested that these sections are invalid, the assumption being that they are all laws with respect to corporations falling within s. 51 (xx.) or are otherwise supported by s. 122 of the Constitution. The presence of par. (d) of the definition of "corporation" might be a ground for disturbing the validity of this assumption. Even so, the rest of the definition is capable of a severable operation in its application in the operative provisions of the Act. Consequently I shall proceed on the footing that the provisions in Div. 1 of Pt V are valid. (at p242)

10. Similar comments may be made about the provisions in Div. 2 of Pt V. They all relate to transactions to which a corporation in the defined sense is a party. Section 75 in Div. 3 of Pt V does not contain any provision which could result in a contravention to which s. 79 applies. (at p242)

11. Section 55 stands, however, in a different position because it does contain a prohibition relating to conduct. In terms it is not confined to corporations and is addressed to a wider world. It provides:

"55. A person shall not, in trade or commerce, engage in
conduct that is liable to mislead the public as to the nature,
the manufacturing process, the characteristics, the suitability
for their purpose or the quantity of any goods."

It is evidently designed to carry into effect a provision of an international convention, the Paris Convention for the Protection of Industrial Property as revised at Stockholm on 14th July 1967, which came into operation on 27th September 1975. This appears from s. 2 (2) of the Act which provides:

"Section 55 shall come into operation on a date to be fixed
by Proclamation, being a date not earlier than the date on
which the Paris Convention for the Protection of Industrial
Property as revised at Stockholm on 14 July 1967 enters into
force for Australia."

In fact s. 55 was proclaimed to come into force on 27th September 1975, a little more than a year after the Act was assented to and came into force on 24th August 1974. (at p242)

12. According to the prosecutors this has the effect that s. 79 has to be read as applying to a division which provides only for contravention by corporations. Section 79 is then seen, so the argument proceeds, as an enactment which not merely provides that contraventions of Pt V are offences against the Act, but as one which also makes independent provision that bodies corporate and persons who contravene the directions as to conduct contained in the Part are guilty of offences. (at p243)

13. The submission is misconceived. No doubt it is correct to say that s. 79 makes a contravention of Pt V an offence against the Act and that it subjects such a contravention to penalty. But there is nothing in the section which suggests that it operates so as to expose to penalty persons other than those to whom the prohibitions contained in Pt V are addressed. In my view s. 79 operates so as to penalize those persons who, according to the terms of Pt V, when properly construed, are capable of contravening its provisions and who do in fact do so. The section does no more than say that the offender, if he is a body corporate, should be liable to a penalty on one scale, and if he is a person not being a body corporate, he shall be liable to a penalty on another scale. So understood the validity of the section is supported by the heads of constitutional power which sustain the various provisions in Pt V, and, as I have said, the prosecutors have not argued that these provisions are invalid. (at p243)

14. Were it necessary so to decide, I should have no difficulty in regarding s. 79 (a) as having an application to s. 55, notwithstanding that this section was not in operation when the principal provisions of the Act came into force. It was not suggested, nor in my view could it be suggested with any semblance of correctness, that the external affairs power (s. 51 (xxix.)) or that power in combination with the incidental power (s. 51 (xxxix.)) cannot sustain the enactment in an anticipatory way of provisions designed to give effect to an international convention once it becomes binding on Australia so long as the provisions do not come into operation before the convention does become binding on this country. Here it is enough that the operation of s. 55 was suspended. Apart from the extended operation which Pt V is given by s. 6 (2) and (3) , until s. 55 came into force there was no room for the operation of s. 79 (a). But this does not preclude us from saying that s. 79 (a) was intended to have an application to s. 55 when it came into force. (at p243)

15. I now turn to s. 6, which gives the Act an extended operation. To understand what the section seeks to achieve one must bear in mind that for the most part the operative sections of the Act which, according to their terms, regulate the conduct of corporations, are based upon the corporations power and the territories power. It will be recalled that in Strickland v. Rocla Concrete Pipes Ltd. [1971] HCA 40; (1971) 124 CLR 468 the Court held that the corporations power could sustain provisions regulating restrictive trade practices engaged in by corporations within the meaning of s. 51 (xx.). Section 6 (1) recognizes that the Act will in the first instance have a direct operation according to its terms and at the same time provides that in addition to this operation the Act shall have a further operation in accordance with the provisions of s. 6 (2) and (3) . (at p244)

16. The first additional operation given to the Act is that given by s. 6 (2). It extends the application of the principal provisions of the Act to persons not being corporations, as well as to corporations, whilst they are engaged in interstate or overseas trade or commerce, trade or commerce between territories or with a territory or in the supply of goods or services to the Commonwealth or an authority or instrumentality of the Commonwealth. (at p244)

17. The sub-section achieves this operation in the main by providing that the Act shall have the effect it would if references to "trade or commerce" were confined to trade or commerce in the aspects already mentioned (s. 6 (2) (a)), if certain sections (s. 46, Pt V (other than s. 55) and Pt VIII) were confined in their operation to engaging in conduct to the extent to which such conduct takes place in the course of, or in relation to, those limited aspects of trade or commerce so mentioned (s. 6 (2) (b)) and, subject to certain qualifications, if the word "corporation" included a reference to a person not being a corporation (s. 6 (2) (h)). There are other alterations for which sub-s. (2) makes provision but they need not be mentioned. Thus it appears that sub-s. (2) is designed to give the provisions of the Act an operation which can be supported not merely by reference to the corporations power but by reference also to the powers contained in ss. 51 (i.) and 122 together with the implied power to regulate the supply of goods or services to the Commonwealth, its authorities and instrumentalities. (at p244)

18. Sub-section (3) then provides for Div. 1 of Pt V having a further additional operation on the footing that it is to have the same effect as it would have if the division (other than s. 55) were confined in its application to engaging in conduct to the extent to which the conduct involves the use of postal, telegraphic or telephonic services or takes place in a radio or television broadcast (s. 6 (3) (a)) and, subject to one other alteration, if a reference to "corporation" included a reference to a person not being a corporation (s. 6 (3) (c)). Thus it appears that sub-s. (3) is designed to give the Act a further operation which can be supported by reference to the power contained in s. 51 (v.) of the Constitution. (at p244)

19. Although the section is somewhat complicated it has its genesis in the unhappy fate which befell s. 7 of the Trade Practices Act 1965-1969 in Strickland v. Rocla Concrete Pipes Ltd [1971] HCA 40; (1971) 124 CLR 468 . The meaning of the section is, however, reasonably clear. It gives to the Act or parts of the Act three different applications: first, an application in accordance with its terms; secondly, an application in accordance with s. 6 (2) and thirdly, an application in accordance with s. 6 (3). (at p245)

20. When s. 6 (2) and (3) give the Act an extended operation by providing that the Act (or Div. 1 of Pt V) shall have the effect it would have if the reference to "corporation" included a person not being a corporation, the result is that the relevant sections are to be read as if they were expressed in the form "corporation and a person not being a corporation". Section 53 (a), read in the light of s. 6 (2) would then provide:

"A corporation shall not, in trade or commerce, and a
person not being a corporation shall not, in trade or
commerce -
(i) between Australia and places outside Australia;
(ii) among the States;
(iii) within a Territory, between a State and a Territory or
between two Territories; or
(iv) by way of the supply of goods or services to Australia
or an authority or instrumentality of Australia,
in connexion with the supply or possible supply of goods or
services or in connexion with the promotion by any means of
the supply or use of goods or services -
(a) falsely represent that goods or services are of a
particular standard, quality or grade, or that goods are
of a particular style or model." (at p245)

21. It is apparent then that, quite independently of the application which s. 79 (a) has to s. 55, s. 79 (a) has an application to s. 53 and to other sections in Pt V once the Act is given the additional operation for which s. 6 (2) and (3) make provision. So understood s. 79 (a) is supported by the heads of constitutional power on which s. 6 (2) and (3) are based. (at p245)

22. The final submission, one which was put on behalf of the prosecutrix alone, was that, as a natural person is incapable of committing a breach of s. 53 (a) and thereby committing an offence under s. 79 (a), a natural person cannot be deemed to have committed such an offence under s. 5 of the Crimes Act. The first proposition in this argument is, of course, incorrect. The examination of s. 53 (a) of the Act has shown that in its extended operation, that for which s. 6 (2) provides, it contains a prohibition addressed to persons not being corporations, as well as to corporations, and is therefore capable of giving rise to an offence on the part of a natural person. This is enough to dispose of the argument, but even if it were not so the argument fails for another reason. (at p246)

23. Section 5 of the Crimes Act, so far as it is relevant, provides:

"Any person who ... by act or omission is in any way
directly or indirectly knowingly concerned in, or party to, the
commission of any offence against any law of the
Commonwealth ... shall be deemed to have committed that
offence and shall be punishable accordingly."

There is no limitation in the language which confines the operation of the section to principal offences capable of being committed by the person who is alleged to have been knowingly concerned in their commission. In Mallan v. Lee [1949] HCA 48; (1949) 80 CLR 198, at p 210 , Latham C.J. rejected a submission to the contrary, a submission which is indistinguishable from that now presented on behalf of the prosecutrix. Dixon J. and McTiernan J. decided the case on other grounds but, as I read their judgments, they offered no opinion on this question. (at p246)

24. Earlier a similar submission was put forward in R. v. Goldie; Ex parte Picklum [1937] HCA 65; (1937) 59 CLR 254, at pp 255-256 . It was rejected by each of the two judges who found it necessary to decide the point (Starke J. (1937) 59 CLR, at pp 263-264 ; and Evatt J. (1937) 59 CLR, at pp 271-271 ). There Picklum an Australian resident who did not, and could not, enjoy the status of a prohibited immigrant, was charged with having been knowingly concerned in the commission of an offence under s. 7 of the Immigration Act 1901-1935. It was an offence which could only be committed by a prohibited immigrant. Starke J. said (1937) 59 CLR, at p 264 :

"...I see no constitutional objection to the Commonwealth
prohibiting its citizens aiding and abetting the contravention
of the Immigration Acts or any other laws of the
Commonwealth under such sanctions as it deems expedient. It is
a common expedient to make persons falling within the
provisions of such a section principals participating in the
offence and punishable accordingly, and I perceive no
constitutional difficulty in such a provision." (at p246)

25. The point here is that if a head of constitutional power enables the Parliament to legislate so as to create a particular offence, then that head of power or the incidental power will authorize a provision having the same effect as s. 5 of the Crimes Act in its application to a person who is knowingly concerned in the commission of the offence. (at p247)

26. Accordingly, I would reject the submissions advanced on behalf of the prosecutrix and I would discharge the order nisi. (at p247)

JACOBS J. I have had the advantage of reading the reasons for judgment prepared by Mason J. and I agree with them and with the conclusion which he expresses. (at p247)

MURPHY J. For the reasons given by Mason J., the order nisi should be discharged. (at p247)

ORDER

Order nisi discharged. Prosecutors to pay respondents' costs including reserved costs.