Victorian Civil and Administrative Tribunal|2007-08-17|Before: Osborn J

The applicant Burton & Parkes Pty Ltd asserts in its statement of claim that at all relevant times it was "trading as certified practising accountants".
It is common ground that Burton & Parkes Pty Ltd retained Mr. Hughes to provide legal services in four unrelated matters.
Burton & Parkes Pty Ltd is dissatisfied with the legal services provided by Mr. Hughes. It alleges that Mr. Hughes breached the terms of the retainer. Alternatively, it alleges that Mr. Hughes was negligent in carrying out the work for which he was retained. By way of remedy, it seeks orders for payment of damages, interest and legal costs.
The jurisdictional challenge calls for an examination of the relevant legislation.

Burton & Parkes Pty Ltd contends that the subject matter of the application is a "consumer and trader dispute" as defined by s.107 of the Act. In substance, a consumer and trader dispute is a dispute between a purchaser and a supplier of goods or services. A dispute of that kind can be heard and determined by VCAT upon application being made to the Tribunal by a party to the dispute: s.108(1) and s.110.
Mr. Hughes contends that s.107 does not extend to services provided by a lawyer, because "services" is defined by s.3 as relating only to services provided in trade or commerce, and lawyers do not provide services in trade or commerce.

' "services" includes any rights (including rights in relation to, and interests in real or personal property), benefits, privileges or facilities that are, or are to be, provided, granted or conferred in trade or commerce, including the rights, benefits, privileges or facilities that are, or are to be provided, granted or conferred under a contract for or in relation to -

(a) the performance of work (including work of a professional nature) whether with or without the supply of goods;'

I have underlined the three parts of the definition upon which I intend to concentrate, although I will concentrate upon them in reverse order.

THE WORDS IN BRACKETS, "INCLUDING WORK OF A PROFESSIONAL NATURE" IN THE DEFINITION OF "SERVICES":

These words appear, at first sight, to have the effect of including legal work in the definition of "services". It soon becomes clear, however, that legal work is included in the definition only if the work is performed in trade or commerce.
L.T. King Pty Ltd v Besser [2002] VSC 354; (2002) 172 FLR 140 is a decision of the Supreme Court of Victoria in which a lawyer was found liable under both the Trade Practices Act 1974 and the Fair Trading Act 1999 for misleading and deceptive conduct. In that case, Osborn J concluded @ 145 that:

'(B) The question of whether conduct in the course of providing professional services is conduct "in trade or commerce" requires an assessment of the essential character of those services.'

In other words, work of a professional nature will fall within the definition of "services" only if it confers rights, benefits, privileges or facilities in trade or commerce. The point is made more directly in Prestia v Aknar (1996) 40 NSWLR 165 @ 194, albeit in relation to slightly different legislation in New South Wales:

'The Act is to govern dealings in the course of those activities or transactions, including professional activities, but only those which, of their nature, bear a trading or commercial character.'

THE WORDS "IN TRADE OR COMMERCE" IN THE DEFINITION OF "SERVICES":

I turn next to consider whether the legal services provided by Mr. Hughes were provided in trade or commerce.

Trade or commerce compared to professional activities:

There are decisions as to whether members of particular professions were engaged in trade or commerce. As examples:

(a) in 1973 it was held that a dentist practising his profession was not a trader, a distinction being drawn between "activities in the field of trade or commerce and activities in the pursuit of a profession": R. v Small Claims Tribunal; ex parte Gibson [1973] Qld.R 490 @ 491;

(b) in 1979 it was held that 'law, and medicine, and dentistry, have always been regarded as professions in the fullest sense, and as standing separately and apart from the field of trade or commerce': Holman v Doel [1979] 1 NSWLR 640 @ 646;

(c) in 1984 it was held that conveyancing did not have a commercial character, although in a different context: Sextus Pty Ltd v McMillan [1985] VicRp 8; [1985] VR 81;

(d) in 1985 it was held that a chiropractor practised a profession and therefore was not engaged in trade or commerce: Fawke v Holloway [1986] VicRp 42; [1986] VR 411;

(e) in 1989 Dawson J observed that 'A barrister appearing for or advising a person engaged in trade does not thereby become a trader any more than a barrister engaged in a criminal case becomes a criminal.': Street v Queensland Bar Association [1989] HCA 53; (1989) 168 CLR 461 @ 539.

Taking a different approach, in 1987 it was held in relation to professions generally that 'where the conduct of a profession involves the provision of services for reward, ..... there is no conceivable attribute of that aspect of professional activity which will take it outside the class of conduct falling within the description "trade or commerce" ': Bond Corporation Pty Ltd v Thiess Contractors Pty Ltd [1987] FCA 84; 71 ALR 615 @ 620.
The view that provision of services for reward is determinative of the services being provided in trade or commerce was rejected by Osborn J in L.T. King Pty Ltd v Besser @ 145, and also by Santow J in Prestia v Aknar @ 195.

The principles espoused in L.T. King Pty Ltd v Besser:

L.T. King Pty Ltd v Besser is significant in the present context for several other reasons. It is a comparatively recent case. It dealt with claims made against a lawyer. It included a claim based upon s.11 of the Fair Trading Act 1999, namely misleading conduct in relation to services provided in trade or commerce. It required a decision to be made as to whether a statement made by a lawyer was made in trade or commerce. Most importantly of all, I am bound to follow it.
The ultimate conclusion reached by Osborn J in L.T. King Pty Ltd v Besser, @ 148, was that 'the nature or character of the particular conduct must be assessed to see whether, as a matter of fact, the conduct is conduct in trade or commerce as these terms are generally understood'.
Before deciding that the conduct in the case before him was conduct in trade or commerce, Osborn J sequentially came to the following conclusions:

'In the case of the practice of the law it is not appropriate to describe conduct in the area of litigation as conduct in trade or commerce.' [@ 145];

'It is also doubtful that the expression of professional advice (which lies at the core of the practice of a profession) constitutes trade or commerce.' [@ 146];

'If conduct in litigation or by way of advice is not to be regarded as conduct in trade or commerce then it follows that this will be true whatever the subject matter of the litigation or the advice.' [@ 146];

'Nevertheless despite the fact that there are core activities of the legal profession which do not constitute trade or commerce, there are many circumstances where solicitors undertake a significant role in the actual conduct or completion of commercial transactions. In such cases it is in my view clearly open to conclude that the specific conduct is conduct in trade or commerce.' [@ 147].

It is apparent from the decision is L.T. King Pty Ltd v Besser that the answer to the question asked at the commencement of these reasons is that some legal services are provided in trade or commerce and some are not.

The effect of the principles in L.T. King Pty Ltd v Besser in the present proceedings:

The nature of the legal work that Mr. Hughes was engaged to perform is not apparent from the application lodged by Burton & Parkes Pty Ltd. The work is described in the application simply as "various legal matters" and "a number of legal matters".
The statement of claim lodged by Burton & Parkes Pty Ltd on 21 December 2006 states in paragraph 3 that Mr. Hughes was retained to act in four matters, namely:

The nature of the work to be performed is not described, but the particulars of the alleged breach of the retainer and negligence indicate that the first three matters involved court proceedings and that the last matter involved preparation of loan documents.

It is clear from the decision in L.T. King Pty Ltd v Besser that legal services might or might not be provided in trade or commerce, which means that there may be a need to draw a line. As was said by the High Court in Concrete Constructions (NSW) Pty Ltd v Nelson [1990] HCA 17; (1990) 169 CLR 594 @ 604:

'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.'

(iii) Should evidence be heard before drawing a line?

In some cases it might be obvious, probably from the pleadings, that the legal services involved have been provided, or not provided, in trade or commerce. In those circumstances, a decision could safely be made without calling evidence.
In the present case, the applicant submitted that evidence should be called before the line is drawn. That was the course adopted in L.T. King Pty Ltd v Besser. Furthermore, in Hongkong Bank of Australia v BPTC Ltd (Supreme Court of Victoria No. 2467 of 1990 BC9503347 @ 37) Batt J concluded that this issue, namely whether legal services have been provided in trade or commerce, 'is pre-eminently one for trial, depending upon the evidence of the particular circumstances'.
The descriptions in the present application and in the statement of claim of the work to be performed by Mr. Hughes are quite inadequate to enable me to determine whether Mr. Hughes provided his services in trade or commerce. Consequently, if it becomes necessary for me to determine that issue, evidence will be required before making the determination.

THE WORD "INCLUDES" IN THE DEFINITION OF "SERVICES":

In my opinion, the issue of jurisdiction can be determined solely by reference to the word "includes" in the definition of "services" in s.3 of the Fair Trading Act 1999.
The purpose of some statutory definitions is to stipulate the meaning of a word for the purposes of the Act. The purpose of other definitions is to include within the meaning of a word something that might reasonably be considered to fall outside the usual meaning of the word.
The difference between "means" and "includes" is explained in Pearce & Geddes Statutory Interpretation in Australia 4th ed. @ 186:

'the orthodox and, it is submitted, the correct approach to the understanding of the effect of these expressions is that 'means' is used if the definition is intended to be exhaustive while 'includes' is used if the definition is intended to enlarge the ordinary meaning of the word:'

All 45 definitions in s.3 of the Fair Trading Act 1999 commence with "means", "has the same meaning", or "includes", indicating a considered choice by the legislature.
As I have mentioned, the applicant seeks the determination of a "consumer and trader" dispute. A consumer and trader dispute must relate to goods or services: s.107. "Goods" is defined by s.3:

(d) gas, electricity, water, sewerage and telecommunications;'

Many sections in the Act, not just s.107, deal with "goods or services". It is unlikely that the legislature intended to limit those sections to the goods set out in the definition of "goods" in s.3. I conclude that items usually described as goods (such as household appliances) are "goods" for the purposes of s.107 without it being necessary to include them in the definition.
It also is unlikely that the legislature, on the one hand, intended that the definition of "goods" follow the general rule of construction that "includes" serve to extend the ordinary meaning of the word and, on the other hand, intended that "includes" serve to make the definition of "services" exhaustive. I conclude that services referred to in s.107 includes services usually described as such, and is not limited to the rights, benefits, privileges or facilities conferred in trade or commerce set out in the definition of "services" in s.3.
I acknowledge that Mr. Masel, counsel for Mr. Hughes, submitted that the definition of "services" is exhaustive, and thus an exception to the general rule. He drew a comparison between the definition of "services" in the Fair Trading Act 1999 and the somewhat similar definition of "services" in the Trade Practices Act 1974. He then referred to decisions dealing with the definition of "services" in the Trade Practices Act. He referred to Queensland Aggregates Pty Ltd & White v Trade Practices Commission [1981] FCA 138; (1981) 38 ALR 217, but that case does not deal with the issue whether the definition of "services" in the Trade Practices Act is exhaustive. He also referred to Chapman v Luminis Pty Ltd (No. 4) [2001] FCA 1106; (2001 123 FCR 62, particularly at [175]. The case is long and complex but, again, it does not appear to me to deal with the relevant issue. Both cases deal with elements of the definition, not with the issue whether the definition is exhaustive.
I will also mention Winnett v South East Water Ltd [2007] VCAT 1064 @ [40], in which Deputy President Steele stated:

'Disputes about services are within the Tribunal's jurisdiction under Part 9 of the Fair Trading Act 1999 [which includes s.107 applicable in the present case] only when the services are provided in trade or commerce - see the definition of service in section 3 which imposes that limitation.'

The statement was made consequent upon a finding that the applicant in that case purchased services, a finding "influenced by the definition of services in the Fair Trading Act 1999 section 4 [presumably 3 was intended] which includes "the conferring of rights benefits or privileges for which remuneration is payable in the form of a levy" " [@ 32 & 33]. The statement undoubtedly is correct if the definition of "services" is an exhaustive definition, but the issue whether it is an exhaustive definition was not addressed (and did not need to be addressed) by Deputy President Steele.
L.T. King Pty Ltd v Besser, the decision of Osborn J to which I referred earlier in these reasons, included a claim based upon s.11 of the Fair Trading Act 1999. That section provides that "A person must not, in trade or commerce, engage in conduct that is liable to mislead the public as to the nature, the characteristics, the suitability for their purpose or the quality of any services". Section 11 is limited expressly to trade or commerce, and not limited to trade or commerce only virtue of the definition of "services" in s.3, meaning that the issue whether the definition of "services" is exhaustive did not arise in that case. It is significant, however, that the legislature saw fit to limit s.11 to trade or commerce within the section itself, and did not see fit to limit s.107 in the same way.
I return to my conclusion that services usually described as such fall within s.107 of the Fair Trading Act 1999 without needing to rely upon the definition of "services" in section 3 of the Act. The term "legal services " is defined in s.1.2.1 of the Legal Profession Act 2004 as meaning "work done, or business transacted, in the ordinary course of legal practice", and appears in many sections in that Act. Consequently, I readily accept that the work performed by lawyers for their clients usually is described as the provision of "legal services". I conclude that s.107 has application to legal services whether or not supplied in trade or commerce.

I find that VCAT has jurisdiction to hear and determine the whole of this application.

Burton and Parkes Pty Ltd v Church Hill Lawyers (Legal Practice) [2007] VCAT 1490 (17 August 2007)

Burton and Parkes Pty Ltd v Church Hill Lawyers

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Burton and Parkes Pty Ltd v Church Hill Lawyers (Legal Practice) [2007] VCAT 1490 (17 August 2007)