In trade or commerce
27 As recognised by the primary judge, the leading authority on the meaning of the phrase "in trade or commerce" in the prohibition against misleading and deceptive conduct is the High Court decision in Concrete Constructions (NSW) Pty Ltd v Nelson (1990) 169 CLR 594 (Concrete Constructions) concerning the statutory predecessor of s 18, being s 52 of the (then named) TPA. The facts of the case are summarised in the judgment of the plurality (Mason CJ, Deane, Dawson and Gaudron JJ) at 599:
The appellant ("the company") is a corporation which was, in July 1987, constructing a building in Grosvenor Square, Sydney. The respondent ("the worker") was one of the company's employees on the site. He sustained injuries when he fell to the bottom of an air-conditioning shaft while attempting to remove a grate positioned at the entry point of the shaft. He alleges that his injuries were caused by the conduct of the company's foreman who wrongly informed him that the grates at the entry points of the air-conditioning shafts were fixed by three bolts on each side and that it was safe to remove them in the manner explained by the foreman. On the worker's case, he fell down the shaft when "one of the grates gave way by reason of the fact that it was not affixed by bolts or otherwise".
28 The High Court concluded that those facts did not give rise to a cause of action under s 52 of the TPA because the statements made by the company's foreman to the worker were not made in trade or commerce within the meaning of the section.
29 The plurality observed that the words "trade" and "commerce" in s 52 are broad terms of common knowledge (at 602):
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".
30 Their Honours explained that the phrase could have either of two potential meanings (at 602-603, citations omitted):
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, 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.
31 As observed by the primary judge, the plurality resolved this choice in favour of the narrower construction (at 603-604, citations omitted):
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 imposed by s. 52 is, however, governed not only by "the terms in which it is created" but by "the context in which it is found" (see Yorke v. Lucas; and, generally, Bank of N.S.W v. The Commonwealth). 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" (O'Brien v. Smolonogov, quoting Federal Commissioner of Taxation v. Whitfords Beach Pty. Ltd.). 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.
32 The plurality illustrated the meaning of the phrase by the following examples (at 604):
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.
33 Toohey J explained the meaning of the phrase in similar terms (at 613- 614, citations omitted):
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: see Re Ku-ring-gai Co-operative Building Society (No. 12) Ltd. But their focus is on commercial activity, the providing of goods and services for reward. …
…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.
34 The High Court's conclusion in Concrete Constructions is applicable to s 18 of the Australian Consumer Law (the statutory successor to s 52): Murphy v Victoria [2014] VSCA 238; 289 FLR 337 at [88]-[92] (Nettle AP, Santamaria and Beach JJA). The conclusion has stood the test of time and been applied on numerous occasions.
35 In Concrete Constructions, the majority observed that conduct may be engaged in in trade or commerce if it is engaged in by a person on behalf of another person (whose interests the first person represents or is seeking to promote) and in the course of the trade or commerce of that other person: at 604 (Mason CJ, Deane, Dawson and Gaudron JJ) and 613 (Toohey J). That principle has been applied in subsequent decisions. In Tobacco Institute of Australia Limited v Australian Federation of Consumer Organisations Inc (1992) 38 FCR 1, the Full Federal Court concluded that an industry association, "formed to promote the interests of a particular industry or whose activities are directed at representing members of that industry in promotional activities, acts 'in trade or commerce' when conveying representations about that industry's product to the general public" (Hill J at 44, with whom Foster J agreed at 25, and to similar effect Sheppard J at 16). So too, in Houghton v Arms (2006) 225 CLR 553, the High Court concluded that employees of a corporation who made misleading statements to a client of the corporation in the course of providing services to the client on behalf of their employer had personally engaged in misleading conduct in trade or commerce (in contravention of the equivalent provisions of the Fair Trading Act 1999 (Vic) which imposed primary liability on persons as well as corporations).
36 The assessment of whether conduct is undertaken in trade or commerce is necessarily fact-specific. The assessment may be assisted by analogies from the decided cases, while recognising that no analogy is perfect or determinative.