Ground 1 - whether conduct was in trade or commerce
30 The High Court in Concrete Constructions (at 602-604) examined the difficulty of answering the question of whether particular conduct is "in trade or commerce" in some circumstances, and adopted a restrictive approach to the expression "trade or commerce", saying:
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 NSW 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.
As a matter of mere language, the arguments favouring and militating against these alternative constructions of s. 52 are fairly evenly balanced…. 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… [T]he 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. …
(emphasis added) (footnotes omitted)
31 It has been observed that the High Court made a deliberate choice in Concrete Constructions between a wide and narrow view of the expression "in trade or commerce" in s 52 and chose the narrow view: see Robin Pty Ltd v Canberra International Airport Pty Ltd (1999) 179 ALR 449 per Gyles J (at [44]). As such "in trade or commerce" would have a restrictive operation and confine the effect of the provision to conduct which "is itself an aspect or element of activities or transactions which, of their nature, bear a trading or a commercial character": Concrete Constructions (at 603). In Concrete Constructions, focus was placed upon "the central conception" of trade or commerce and not 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 Yates J noted in Toben v Jones (2012) 298 ALR 203 (at [40]) and the authorities there cited, conduct "in relation to" or "in connection with" trade or commerce is not sufficient to engage the provision.
32 Mr Fletcher contends that typically, editorialising in a trade publication would not be regarded as conduct in trade or commerce. Consistently with this, he says the content of the Article is not such as to amount to "promotional activities in relation to, or for the purposes of, the supply of goods or services to actual or potential consumers", being the test flowing from Concrete Constructions. So, for example, Mr Fletcher contends that participation in industry related activities, such as the giving of public lectures, would generally not be regarded as falling within the scope of s 18 ACL, relying on Fasold v Roberts (1997) 70 FCR 489 per Sackville J (at 550).
33 Seafolly Pty Ltd v Madden (2012) 297 ALR 337 (at first instance) was relied upon at trial. The Full Court delivered its judgment on appeal in Madden v Seafolly Pty Ltd (2014) 313 ALR 1 after the primary judge in the first instance case reserved her Honour's decision. At first instance, Tracey J had found that a swimwear designer's publication on her personal Facebook page of false allegations that a trade competitor had copied her designs was conduct in trade or commerce for the purposes of s 18 ACL because she had alleged that Seafolly had engaged in conduct which was "to the detriment of her own business": Madden v Seafolly per Rares and Robertson JJ (at [97]).
34 On appeal, Marshall J agreed (at [9]) with the conclusion of Tracey J and noted that the statements were made "in such context and in such circumstances as to render them statements having a commercial character". Justices Rares and Robertson said (at [98]):
[w]e would add to the last point that the evidence showed that a substantial number of those who made comments on the personal Facebook page were in the fashion industry. Ms Madden posted comments on her personal site using both her own name and the name "White Sands Swimwear Australia" responding to the postings of her Facebook "friends" or, perhaps more accurately, correspondents. For example, she wrote on her personal page under the White Sands name: "Lucy and Holly!!! These are the rip offs Seafolly did! Jeeze, you girls. We have them in Black, in store now:)". Taking these matters in combination it should not be concluded, in our opinion, that any of the Facebook statements were of a private character and in our opinion there was no error in the conclusion of the primary judge that the statements had a trading or commercial character. ...
35 Mr Fletcher argues that in contrast to Ms Madden, he had a legitimate interest in challenging the content of the Flyer which was wholly separate from his own business interests. According to Mr Fletcher, he had developed a reputation as an authoritative commentator on newsagency issues in Australia and was regarded as an "experienced and influential figure and voice in the industry". The primary judge accepted (at [34]) that Mr Fletcher had a "genuine interest and aim in promoting discussion in the newspaper community on topics of interest to newsagents, and that the Blog [was] a key element in achieving that objective". But that was only part of the primary judge's analysis.
36 One question for consideration is whether the characterisation of the conduct in publishing the Article is, in the circumstances of this case, coloured by mixed purposes, as found by the primary judge, in relation to publication of the Blog as a whole. In that regard, Mr Fletcher argues that the primary judge erred by relying on six posts Mr Fletcher published on the Blog between March 2006 and January 2010 in which he discussed his own commercial interests. Mr Fletcher argues that the six posts referred to were not part of the impugned conduct and were irrelevant to the assessment of whether publishing the Article was in trade or commerce. There is a difficulty with this argument. On the one hand, Mr Fletcher relies upon broader, less commercial interests evident from his conduct in publishing the Blog as a whole, yet on the other hand, denies that regard may be had to the commercial elements identified by the primary judge. It is difficult to see that he can have this argument both ways.
37 Mr Fletcher also argues that the primary judge's finding (at [38]) that "it is clear from perusing the Article that [Mr Fletcher posted it] to defend [newsXpress] from what he saw as potential poaching of franchisees by Nextra …" was a finding unsupported by the evidence. In this regard, Mr Fletcher relies upon his evidence about the Blog in a general sense, which he says is not operated as a commercial service, but as a "forum for discussion, information and debate concerning newsagency issues". Mr Fletcher argues that even if his reasons for posting the Article included the protection of his own commercial interests (which he says is unsupported by the evidence) this is insufficient to support a finding that the conduct was "in trade or commerce". He relies on Village Building Co Ltd v Canberra International Airport Pty Ltd (2004) 139 FCR 330 (at [59]) per French J (as his Honour then was), Sackville and Conti JJ where their Honours said that "[t]he fact that conduct has the purpose or effect (or both) of maintaining or protecting a business is not, of itself, enough to ensure that the conduct is in trade or commerce".
38 Further, Mr Fletcher complains that her Honour's analogy with Universal Music Australia Pty Ltd v Cooper (2005) 150 FCR 1 was inappropriate because Mr Fletcher's Article was "part of an industry publication and to be distinguished from a publication directed solely to his commercial interests". It is said that in the publication of the relevant representations, Mr Fletcher was not carrying on a business, and the primary judge's conclusion (at [38]) that the posting of the Article "was not conduct divorced from his relevant actual or potential trading or commercial relationships" was a much wider test than that specified by the High Court in Concrete Constructions.
39 In considering Mr Fletcher's arguments it is helpful to recall how different the facts in Concrete Construction were from the facts now under consideration. In Concrete Constructions, Mr Nelson had been injured from a fall after a co-employee misinformed him about the secure nature of a grate covering an air-conditioning shaft. (The advantage in suing under, what was then, s 52 TPA was that a damages award under the TPA would not be limited by the limitation of damages imposed by Workers' Compensation legislation in New South Wales.) As the High Court noted (at 604), s 52 was not intended to impose by way of a "side-wind" (an expression used by Brennan J as his Honour then was, in Parkdale) 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. As the plurality (Mason CJ, Deane, Dawson and Gaudron JJ) noted (at 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. Toohey J (at [614]) particularly emphasised that the conduct was required to be "in trade and commerce" not "in connection with" or "in relation to" trade and commerce. The plurality also emphasised in Concrete Constructions that conduct towards persons, whether they be consumers or not, including promotional activities in relation to, or for the purposes of, the supply of goods or services to actual or potential consumers, will usually be conduct in trade or commerce.
40 The position of those delivering public lectures, utterances, publications or articles presents a range of options. At one end of the scale, a communication may be similar to that in Fasold. In that case there was no commercial relationship between the lecturer and the organisation which arranged the lectures; the lecturer received no remuneration for his lectures and was not motivated by any desire to promote any business activities. Rather, he wished simply to disseminate his own views on a biblical topic. (The case concerned the availability of evidence supporting the old-testament story in relation to Noah's Ark.) At the other end of the scale, a communication may include more immediate and direct business interests, such as the communication by Ms Madden attempting to dissuade her customers from being attracted to her competitor, Seafolly.
41 In Fasold, Sackville J summarised (at 531) the test formulated by the High Court in Concrete Constructions. His Honour observed that a person engages in trade or commerce if he or she publicly makes presentations to advance his or her own commercial interests or of trading entities represented by the presentor. That may be so even if that person does not engage in trade or commerce himself or herself, but makes public statements with a view to persuading persons to invest in a particular trading corporation.
42 Sackville J expressed a concern about the care to be exercised before making orders restraining statements made in the course of public discussion on issues regarded by many people as being important to their religious or ideological beliefs, at least where the motivation for making such statements was not primarily commercial in character. His Honour said (at 550):
[m]oreover, in my view, considerable care must be exercised before making orders restraining statements made in the course of public discussion on issues regarded by many people as important to their religious or ideological beliefs, at least where the motivation for making such statements is not primarily commercial in character. Unless caution is exercised, there is a serious risk that the courts will be used as the means of suppressing debate and discussion on issues of general interest to the community. It is no answer to the concern I have identified that any orders made by the Court will restrain only representations that have been shown to be false. The very task of having to justify impugned representations may deter those with limited resources (both financial and emotional) from engaging in discussion of matters of wide community interest. If the views they put forward are ill-informed or plain wrong, a democratic society offers ample opportunity to rebut those views. As the publicity preceding this case (of which there was evidence) demonstrates, there are means available to counter what are said to be misrepresentations or errors made in public presentations on issues of general interest, without invoking the TP Act or the Fair Trading Acts.
43 On appeal in Fasold (Plimer v Roberts (1997) 80 FCR 303), the Full Court took the same view, emphasising the need for open, intellectual and religious debate, even if carried on through commercial avenues.
44 Of course, the subject matter and purpose of the lecture in Fasold could not be further removed from commercial content in the case at hand.
45 As noted by the Court in Village Building, public advocacy regarding legislative changes as to taxation or tariff laws, or even opposition to a land resumption would be unlikely to constitute conduct in trade or commerce. On the other hand, it has been accepted that even though a representation is not made as part of the trade or commerce of the actual representor, it will be in trade or commerce if it is made in the trade of the representee corporation: Houghton v Arms (2006) 225 CLR 553; Concrete Constructions per Toohey J.
46 To evaluate the character of the conduct in the current case, it is necessary to view the key elements collectively, rather than one by one. Some of the key facts on which the primary judge relied in reaching a conclusion that the publication of the Article by Mr Fletcher constituted conduct in trade or commerce include the following findings of fact:
(a) newsXpress was the franchisor of a newsagency franchise in competition with Nextra;
(b) Mr Fletcher was a director and part-owner of newsXpress;
(c) Mr Fletcher owned 100% of Tower, which sells point of sale software for newsagents;
(d) Mr Fletcher appreciated the status and authority that the publication of the Blog of this nature conferred on him in the newsagency community;
(e) Mr Fletcher had not previously hesitated to use the Blog to promote his own commercial interests;
(f) the Article is an example of Mr Fletcher using the Blog for commercial purposes, namely, to promote newsXpress and his business interests in Tower; and
(g) the posting of the Article was for the purpose of defending newsXpress from what he saw as potential poaching of franchisees by Nextra.
47 Mr Fletcher challenges the last factual finding, which he says is unsupported by the evidence. However, this contention is based simply on the fact that Mr Fletcher denied the primary judge's finding in relation to the purpose of the Article. There is no challenge in the grounds of appeal to the factual finding. This finding of fact was a vital link in determining the question of whether or not the conduct was in trade or commerce. The purpose of the publication is a matter which is readily capable of inference from all of the surrounding facts, including the particular content of the publication itself, not least of which is the disclosure at the foot of the Article that Mr Fletcher is a director of newsXpress. This disclosure, taken in context, while commendably frank on the part of Mr Fletcher, makes clear that the attack on the Nextra Flyer should not be regarded as emanating from someone with an independent objective viewpoint, but rather, from a competitor in the same industry who was concerned about his own and other potential franchisees being misled by false statements made by Nextra. The context of the Article is not far removed from that of conventional comparative advertising which involves a direct representation in the form of an assertion as to some inadequacy of a competitor's product. It is has never been doubted that such advertising is conduct in trade or commerce. As with the Article in question, there is nothing at all wrong with comparative advertising, as long as any facts conveyed are accurate.
48 The conclusion reached by the primary judge that the posting of the Article was for the purpose of defending newsXpress from what Mr Fletcher saw as the potential poaching of franchisees by Nextra necessarily involved rejecting Mr Fletcher's contention that the Blog was only published for altruistic reasons.
49 The strength of the language used in Mr Fletcher's Article in referring to false and misleading statements in the Nextra Flyer is not the sort of content that one would generally expect to hear in a "public lecture", which was the analogy contended for by Mr Fletcher. Rather, the primary judge properly considered the facts in Universal Music Australia represented a closer analogue to Mr Fletcher's use of the Blog, particularly the publication of this Article.
50 As to the complaint concerning reliance by the primary judge on previous commercial usage of the Blog, while the context of the Blog as a whole is not entirely irrelevant, analysis must centre on the particular conduct pleaded, namely, the publication of the Article itself. If that were not so, a party adversely affected by conduct breaching s 18 ACL would be unprotected simply because the particular form of conduct was preceded on other occasions by non-contravening conduct. Such an outcome could not reflect the statutory purpose of s 18 ACL. However, while it may be a distraction to examine the use of the Blog as a whole in a general sense rather than the Article's content specifically, this issue arose largely because of the defence conducted by Mr Fletcher to the effect that the Blog was wholly for altruistic purposes as a forum for discussion, information and debate, and that it was not for the promotion of his commercial interests. As that point was raised, it was entirely open to Nextra to challenge this contention by reference to the other posts on the Blog. Whilst the real issue is the publication of the Article itself, once Mr Fletcher had raised this ground, not only was it proper for it to be challenged, but it was entirely appropriate for the primary judge to rely upon the other instances of commercial self-promotion contained in the Blog.
51 Mr Fletcher is not at all assisted by the Full Court decision in Madden v Seafolly. The primary judge did not have the benefit of the Full Court's reasons in Madden v Seafolly at the time of argument. It is clear, however, that the conclusion in Madden v Seafolly on appeal supports the decision under appeal. In Madden v Seafolly, the statements in issue were made on Ms Madden's personal Facebook page as well as in the Facebook page of her business "Whitesands" and in emails to various media outlets. The Full Court found (at [97]-[98]) that the statements published on her personal Facebook pages were in trade or commerce and upheld the findings of the primary judge at first instance (at [83]), which read as follows:
…Ms Madden was the principal of Whitesands, a trade competitor of Seafolly. Her statements related to the manner in which Seafolly conducted its business. She alleged that Seafolly had engaged in conduct which was improper to the detriment of her own business. She thereby sought to influence the attitude of customers and potential customers of Seafolly. …
52 As noted above (at [34]) the Full Court added "… [w]e would add to the last point that the evidence showed that a substantial number of those who made comments on the personal Facebook page were in the fashion industry." Aside from the relevant context being the newsagency industry rather than the fashion industry, the relevant facts under consideration in this appeal are very similar. Specifically, Mr Fletcher was a director and part-owner of newsXpress, a competitor of Nextra. NewsXpress and Nextra were two major competitors in the Australian newsagency franchising business. The statements related to the manner in which Nextra conducted its business. Mr Fletcher alleged that Nextra had engaged in conduct which was improper and to the detriment of other newspaper franchises, including his own. He thereby sought to influence the existing and potential franchisees of Nextra. The readers of his Blog were members of the newsagency industry. Both in Seafolly and in the case of Mr Fletcher each of the parties had a commercial interest in attacking the competitor. This case has much in common with Seafolly.
53 While Mr Fletcher relies on Village Building, the present circumstances are distinctly removed from the facts in issue in that case. In Village Building, the operator of the Canberra Airport had published forecasts of aircraft noise levels, which were provided to the Minister as required by legislation. The forecasts were also published on the Canberra International Airport's (CIA) website and used in a public debate concerning rezoning land under the flight path. Village, as a developer, contended the publication was in trade or commerce. On appeal, the Full Court said (at [53]):
The remaining representations relied on by Village were made by CIA to members of the public and to elected councillors and parliamentarians as part of a campaign to resist the application to rezone Tralee to facilitate residential development. There was no relevant trading or commercial relationship between CIA and the persons to whom the representations were made (although doubtless some would have occasion to use Canberra Airport from time to time). The representations could not be described as promotional activities designed to persuade consumers to use the services offered at Canberra Airport. Nor were they made as part of a process designed to secure approval to a commercial transaction or dealing, such as the sale of a component of CIA's business (cf Dresna Pty Ltd v Misu Nominees Pty Ltd [2004] ATPR 42-013).
(emphasis added)
54 By comparison, in the present case there was a significant trading relationship involved, namely, between newsXpress and Nextra as trade competitors. Further, the Article was correctly found to be a promotional activity directed at newspaper franchisees.
55 It cannot be doubted that industry participants may from time to time act as commentators on industry affairs without those comments being in trade or commerce. Mr Fletcher draws on the example of the decision in SingTel Optus Pty Limited v Australian Football League [2012] FCA 138, where Edmonds J considered denigrating statements made by the Chief Executive Officer (CEO) of the Australian Football League about Optus engaging in illegal activities by operating its television recording service. His Honour held that those comments were not made in trade or commerce because, as his Honour observed (at [14]):
The statements complained of were part of a wide-ranging interview with [the CEO] covering a variety of topics, not all of them having to do with the AFL at all. To the extent that they concerned the AFL's commercial interests, they consisted of statements of opinion by [the CEO] about the health and governance of the game and the member clubs of the AFL. To the extent that they concerned Optus, they were value judgments about the integrity and conduct of Optus in relation to the recording of content in respect of which the AFL owned the copyright.
56 Mr Fletcher argues that his comments are properly characterised the same way, but there are several differences between the facts at issue in the present appeal and those in Singtel Optus. First and foremost, the entirety of Mr Fletcher's Article was an attack on Nextra. It was not part of a "wide-ranging interview" on other unrelated topics. Secondly, the entity which Mr Fletcher was attacking was his direct business competitor. Thirdly, findings were made, and were entirely reasonably made, by the primary judge that the purpose of the publication of the Article was to protect Mr Fletcher's own business interests which were adversely affected by losing franchisees to Nextra as a result of what he said were false and misleading statements by Nextra in its Flyer. The facts of this case were quite different from Singtel Optus.
57 There can be little doubt that the remarks made by a commentator, as distinct from an industry participant, where they are unlikely to be intended to have an impact on trading or commercial activities, would not be conduct in trade or commerce. However, Mr Fletcher was not an independent commentator. He was an active participant in the newspaper franchise industry and intended his conduct to have an impact on trading or commercial activities.
58 The contentions advanced for Mr Fletcher on the first ground of appeal cannot succeed. The conclusion that the conduct was in trade or commerce was correct. Ground 1 must fail.