Phelps, Robert Errol v. Western Mining Corporation Ltd & Ors [1978] FCA 50

Federal Court of Australia|1978-06-30|Before: Deane JJ

NEW SOUTH WALES DISTRICT REGISTRY ) No. G 70 of 1977 ) )

AND : WESTERN MINING CORPORATION LIMITED, PEKO-MINES LIMITED, ELECTROLYTIC ZINC COMPANY OF AUSTRALASIA LIMITED, PANCONTINENTAL MINING LIMITED, QUEENSLAND MINES LIMITED, NORANDA AUSTRALIA LIMITED.

ORDER JUDGES MAKING ORDER : Bowen C.J., Franki and Deane JJ. DATE OF ORDER : 30th June, 1978.

THE COURT ORDERS THAT :

. Question answered "yes".
Respondents pay the applicant's costs of

the hearing on LOth April, 1978 before the Full Court.

Trade Practices - application for injunction to restrain alleged false advertising - whether the

applicant has locus standi - meaning of "any other person".

BETWEEN : ROBERT ERROL PHELPS Applicant AND : WESTERN MINING CORPORATION . LIMITED,

PEKO-MINES LIMITED, ELECTROLYTIC ZINC COMPANY OF AUSTRALASIA LIMITED, PANCONTINENTAL MINING LIMITED,

QUEENSLAND MINES LIMITED, NORANDA AUSTRALIA LIMITED.

) ) NEW SOUTH WALES DISTRICT REGISTRY ) No. G 70 of 1977 ) )

ACT, 1974 BETWEEN : ROBERT ERROL PHELPS Applicant AND : WESTERN MINING CORPORATION LIMITED,

PEKO-MINES LIMITED, ELECTROLYTIC ZINC COMPANY OF AUSTRALASIA LIMITED, PANCONTINENTAL MINING LIMITED,

QULENSLAND MINES LIMITED, NORANDA AUSTRALIA LIMITED

Respondents CORAM : Bowen C.J., Franki & Deane JJ. Friday, 30 June 1978. JUDGMENT BOWEN C.J. The applicant, Mr. Phelps, 1s concerned about the mining of uranium in Australia. In his statement of

claim he alleges that the respondents are members of an unincorporated association known as the Australian Uranium Producers Forum. He alleges that the respondents, acting

in trade or commerce, have caused advertisements to be published on the subject of uranium mining, nuclear power, energy needs and related subjects. Further he says that

the advertisements are misleading or deceptive or were likely

to mislead or deceive, and the respondents' conduct was a

contravention of s.52 of the Trade Practices Act, 1974. He seeks injunctions under s.80 of that Act to restrain such conduct, and to restrain conduct that is in contravention of s.55 of the Act. The question before the Full Court is, assuming in his favour these allegations to be true, whether Mr. Phelps has the standing to obtain the injunctions sought under s.80. That question has been referred to the Full Court as a preliminary question of law.

Sections 52 and 55 are contained in Part V of the Trade Practices Act which is headed "Consumer Protection". They are in Division 1 of that Part which is headed "Unfair Practices". They provide as follows :

"52,(1) A corporation shall not, in trade or commerce, engage tn conduct that ts misleading or deceptive or ta likely to mislead or dectieve.

Diviston shall be taken as limiting by tmplicatton the generaltty of sub-section (1).

<A person shall not, tn trade or commerce, engage in conduct that ts ltable to mislead the publie as to the nature, the manufacturing process, the characteristics, the suittabiltty for their purposes or the quantity of any goods,"

"80.(1) The Court may, on the application of - (a) the Minister; (b) the Commission; or

(ce) subject to sub-section (1A) - any other person,

grant an injunction restraining a person from engaging tn conduct that constitutes or would constitute -

(a) a contravention of a provision of Part IV or V "

These sections contain provisions introduced by the Trade

Practices Amendment Act 1977 which came into force after the proceedings were commenced, but nothing turns on that point.

Counsel for the respondents argued that the words "any other person" in s.80(1)(c) must be read down to accord with the presumed intention of Parliament. It was argued that Parliament intended to modify the principles applicable to the standing of private citizens to enforce public rights in their own name and not on the relation of the Attorney-General, by removing the requirement that such a litigant suffer either an infringement of some private right of his own or suffer special damage other than that suffered by the rest of the

public (See Boyce v. Paddington Borough Council [1903]

1 Ch. 109; Helicopter Utilities Pty. Limited v. Australian National Airlines Commission [1962] N.S.W.R. 747.) I have

no doubt that the section goes that far (World Series Cricket

Pty. Ltd. v. Parish (1977) 16 A.L.R. 181 at pp. 186 - 7, 194 and 199).

Then 1t was argued that, having romoved this restriction on standing, the legislature could not have intended anyone, including the officious bystander, to move under s.80(1) (c). Rather, in the context of a contravention of Part V, the persons entitled to move under s.80(1)(c) would be those whom Part V is designed to protect, namely, consumers. It was said that s.80 is concerned with the enforcement of Part V, and it is only those who are contemplated by Part V as being affected

by a contravention of a provision of that Part who can avail

themselves of the remedy afforded by s.80. Thus it was

argued only consumers can seek an injunction under s.80(1) (c) to restrain a contravention of Part V. It was submitted that the public interest was primarily protected by s.80(1) (a) and {(b). A consumer for these purposes will include a prospective consumer, and may be limited to a person suing to protect his interest as a consumer. It should be noticed that on this argument, a competitor of a person engaging in conduct that contravened Part V would not have standing to move under s.80 to protect the consuming public from the deceptive practice.

the High Court has handed down judgment in Hornsby Building

Information Centre Pty. Limited & Anor. v. Sydney Buiiding Information Centre Limited (1978) 18 A.U.R. 639. There

the High Court was primarily concerned with the question whether ss.52 and 80 enable a person to bring proceedings to protect his reputation and goodwill from the use of a trade name by a competitor which is said to be deceptively similar to his own.

Barwick C.J., with whom Aickin J. agreed, held that s.52 does not give the Court a jurisdiction to entertain passing off actions, and although a proceeding which is brought to protect the public from being deceived may not be defeated because the plaintiff will obtain a benefit to his own trade ° or business by the cessation of the deceptive practice, nevertheless where the proceedings are no more than proceedings for the protection of that trade or business, s.52 will not

avail him. The qualification there expressed seems necessarily

to imply that a personvho properly brings a proceeding under

s.52 to protect the public from being misled or deceived, may include a trade competitor, and would not be restricted to a consumer.

That conclusion is clearly expressed in the judgment

of Stephen J. with whom Jacobs J. agreed. His Honour rejected,

as I read it, the argument that s.52, » « .. is concerned

only with the protection of consumers and not of traders

who . . . complain of the effect upon their business of the conduct of a competitor". (at p.643). His Honour said (atM645-6):

"Tt ts, no doubt, somewhat of a novelty that a quite extensive jurisdiction in passing off acttons, traditionally the concern of the Supreme Courts of the States, should be conferred upon the Industrial Court and that this should be done by an Act desertbed as one 'relating to certain Trade Practices' and by sections not very explicitly dtreeted to such a subject matter. However this ts, I think, but a consequence of the very dtrect relationship which necessartly exists between the deception of consumers tn the course of trade and the injury caused by the unfatr practices of a trade rival. Such deception will quite often be the means adopted to zroduce that injury. Legislation which aims at the prevention of the former will at the same time tend to put an end to the latter. If, moreover, the legislative prohtbitton ean be enforced by an injunetton which 'any other person' may seek - see 8.80(1), it then becomes posstble for a trader, injured by the competition of hts trade rival, to gain a remedy under the Act instead of having recourse to ctvil action by way of proceedings for passing off. The remedy in such a case will not, as in passing off, be founded upon any protectton of the trader's gooduill but, being directed to preventing that very deception of the publie which is injuring hts goodwill, tt will nevertheless be an effeetive remedy for that of which he complatns.

The provistons of s.82, not invoked in this case, whtch allow a person who suffers loss by another's act which

ts contravention of 8.52 to recover by action the amount of hts loss, may render the statutory remedy even more

It follows from what I have satd that in my view the Sydney Centre ts not to be cxueluded from recourse to relief under s.80 against contravention of s.52(1) because there are no private users of its services or because it has initiated these proceedings essentially

for its own purposes in protection of tts own interests and not those of consumers."

Thus, although s.52 is concerned not with unfair competition, but with misleading or deceptive conduct, a competitor in protecting the public from such conduct may obtain a collateral advantage to his competitive interest. He has standing to proceed under s.80. His Honour then, with the assistance

of relevant principles drawn from the tort of 'passing off,

held that the conduct there complained of could not be misleading or deceptive.

"Thia remedy may be applied for by anyone, including a

Indeed, the ctreumstances would be very unusual where

the person seeking an tnjunetion against deceptive on

misleading conduct would be apprehensive of being deceived or misled. A trade competitor may claim

an injunetion, even tf tts motivatton is to prevent

the defendant from passing-off its goods or services

The remedy afforded by s.80(1)(c) 18 a remedy primarily in protection of the class of persons affected by the conduct called in question. In this sense it is in protection of the public against misleading and deceptive practices. Incidentally or collaterally with that protection an applicant under s.80(1)(c) may obtain an advantage to his own trade or business. His standing, however, is derived from the fact that the essential nature of his suit is one for the protection of the public interest. In my view it is irrelevant whether an interest of his own is affected or not (See Parish v. World Series Cricket (1977) 16 A.L.R. 181 at pp. 186 - 7, 194). The standing which the legislature afforded under s.80(1)(c) is expressed in the clearest and

simplest terms. In my opinion there is no warrant for

qualifying the language which the legislature has used.

Certainly the qualifications for which the applicant contends cannot survive the decision of the High Court in

Hornsby Building Information Centre Pty. Limited v. Sydney

Building Information Centre Pty. Limited, for there it was

held that a competitor of a defendant has standing under s.80(1)(c) not by reason of his competitive interest, but rather because he is one of an unqualified class of persons who can proceed under the section.

I do not find anything in the structure of Parts V or VI or the terminology of the other provisions of those Parts that throw doubt on this conclusion. Nor do I find any assistance in the use of terms in other legislation, roughly comparable to those used in s.80(1)(c).

It was said that to give standing to any person, including the officious bystander, would require the Court to develop principles as to when in its discretion it would refuse an injunction at the suit of a person who had standing, but whose suit was, for example, officious or vexatious, and thus was one in which the Court should refuse the injunction sought. This it was said was to leave too much to the discretion of the Court, as a plaintiff would be uncertain whether his interest was sufficient to surmount any discretionary bar.

I prefer to make no comment on whether the Court's discretion under s.80 includes a discretion such as that envisaged, and if it does what its scope might be. It should be remembered though that the Court has inherent jurisdiction

to stay proceedings which are oppressive, vexatious, or an

abuse of the process of the Court, a jurisdiction which no

doubt would be exercised according to long established principles. Certainly in granting the prerogative writs,

at least of certiorari and prohibition, the courts have widened the locus standi which an applicant need show but refused the relief on discretionary grounds if the applicant does not have a sufficiently close or real interest in maintaining the suit (e.g. The Queen v. Graziers Association

of N.S.W.; ex parte Australian Workers Union (1956) 96

C.L.R. 317; Greater Wollongong City Council v. Dunn & Ors. {1973] 1N.S.W.L.R. 36). Often though in such cases there

is no question of the protection of the public interest. That is not to say that because the injunction protects the public interest no such discretion exists. As Menzies J. said in Cooney v. Ku-ring-gai Municipal Council (1963) 114 C.L.R. 582 at p.605, "The wide discretion of the Court is

an adequate safeguard against abuse of a salutary procedure". Where however in an application under s.80 a breach of Parts Iv or V is shown, it will often be in the public interest that an injunction under s.80 be granted, whatever the interest of the applicant in bringing the suit.

Whatever the position might be, I do not consider that the argument assists the respondent on the present question. Even if the proposition is correct, and the possibility of an applicant having to face an uncertain discretionary bar to relief if his interest is not sufficiently strong 1s a real possibility, I cannot infer that that is a

result which the legislature must be presumed not to have

intended. Yet it is only if that step is taken that there can be any ground for qualifying the words which the legislature has used.

room for implying any qualification on the words "any other person" used in s.80(1)(c). The applicant inevitably satisfies that description, and has standing to seek an injunction under that section. In my opinion, the question should be answered, Yes. I would order the

respondents to pay the applicant's costs of the hearing

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IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY No. G7O of 1977 GENERAL DIVISION

Anclicant AND: WESTZRN MINING CCRECT ICN LIM T=, PEI _-

Franki J. I agree with the reasons for judgment of the Chief Judge which I have had the benefit of reading. I also agree that the question should be answered yes and <net the respondents should be ordered to pay the applicant's ccsts of the hearing before the Full Court.

A consideration of s.13 of the Crimcs Act 1974 suggests that there is no reason to reco1l from 2 literal interpretation of legislation which provides that any person

may commence proceedings under it where the public interes

is involved. Section 13 of the Crimes Act 1914 vrovides

"Unless the contrary intention anocears in the Act or regulation creating the offence, any person may -

commitment for trial of any person in respect of any indictable offence against the law of the Commonweai ch; or

(b) institute proceedings for the summary conviction of@y person in respect of any offence against the law of the Commonwealth punishable on summary conviction." This section was considered by the High Court in Brebver v. Bruce (1950) 82 C.L.R. 161. Latham C.J., with whose judgment Webb and Kitto JJ. agreed, said at p.164 with regard to this section "Thus the presumption is that any perscn whosoever may institute a prosecution fcr any offence against a Commonwealth Act or regulation. In order to exclude the application of this vresumption it 18 necessary that a contrary intention should appear in the legislation creating the offence." McTiernan J. at p.169 pointed out that the principle which underlies s.13 is that the enforcement of the criminal law is generally a concern of the public. Whilst a contravention of Part IV of the Trade Practices Act 1974 1s not a criminal offence, never- theless a substantial pecuniary penalty may be imposed in respect of such a contravention (s.76). The public interest involved in Part IV of the Trade Prectices Act 1974 assists in reaching the conclusion that the remedies provided by

s.80 of the Act may be applied for by "any other person"

and that the legislature did not intend any limitetion on

those words. ee1rtity tat wns wid the - - ---~ - - - Drecedlns Paes are a true covy of lho neasons for Judgment herein of his Honour Nr. Justice Frank!

LINTTLN, PRiio- ints LIMITED, ELECTRORYTIC ZINC COMPAL CF AUSTRALASTA VINIT 1),

DEANE J I agree with the judgment of the Chief Judge.

other person" connotes any other person whatsoever. The

conteat in which the phrase appears in s 80(])(c) of the Trade

Practices Act, 1974 ("the Act") does not, upon analysis,

suggest, let alone justify, the conclusion that the Legislature intended that the phrase be modilied by the engrafting of speculative qualifications such as "who 1s 2 consumnet" or

"who 1s a competitor" or "who has an interest of a type which would give him standing to institule common law civil proceed-

The argument that to give the words whach the Purliarence has used their ordinary meaning would, to use a popular phrase, "open the flood-gates of litigation" strikes me us treelevant and somewhat unreal. Irrelevant, 1n that I can sec nexther warrant for concluding that the Parliament did not intend that flood-gatcs be opened on practices which conliarene the provis- 1ons of the Act nor reason for viewing that prospect, 1f 1t were a realistic one, with other than equanimity Unreal, in that the argument not only assumes the existence of a shoal of of ficious busybodies agitatedly waiting, behind "the flood- gates", for the opportunity to institute costly litigation in which they have no legitimate interest but treats as novel and revolutionary an approach to the enforcement of laws which has long been established in the ordinary administration of the

criminal law (sce Holdsworth, A History of English Law,

Vol. Il, p. 453, Vol. 'IX, p. 236 and p 240, Mr. Pryun's Case

[1794] 5 Mod. Rep. (Leach) 459, Berchet's Case [1794] 1

Shower 106 at pp. 119-120, Crimes Act (Commonwealth) 1914,

s.13; Brebner v. Bruce (1950) 82 C.L.R. 161 and note, apropos

. proccedings under the Trade Practices Act, Norris' Case

[1825] 2 Keny. 300, 96 E.R. 1189, where Lord Mansfield C.J.,

speaking on behalf of the Court of King's Bench, declared

"that if any apreoment was made to fix the price of sult, or any other necessity of life (which salt emphatieally was), hy people dealing in that comnodity, the Court would be glad to lay hole of an opportunity, from what quarter socver th complaint eame, to shew their sense of the crime" (1talies

added)). To confer, as the Crimes Act (supra) does, autuority

upon "any person" to institute criminal proveedings in respecr of an alleged contravention of a law is, to my mind, no less likely to "open the flood~gates of litigation" than to

confer authority lo institute proceedings tor an injunction

to restrain repetition of the contravention. 'In the contcxt of Brebner's Case (supra), one may be permitted the comment that the broken public telephones around the cities of Australia perhaps provide mute testimony of how dry the round beneath the flood-gates has remained.

The overall question of what, 1f any, restrictions should exist upon the ability of the ordinary citizen to approach the courts for the enforcement of the law in matters involving the public interest 1S currently, and properly , the subject of expert examination and public debate (see, for example, The Australian Law Reform Commission's Working Paper No. 7, "Access to Courts ~ 1", 9 November 1977). It is patently desirable that the Legislature does not assume that traditional rules of the common law relating to logus to instatute civil proceedings are universally appropriate to circumstances where laws are increasingly concerned with the

attainment and maintenance of what are seen as desirable

national economic and commercial objectives and standards and with the protection not only of the life and liberly cf the citizen but of the environment in wiich he lives and of the quality of the life which he may lead. There 15 lititde merit in approaching the construction of a staiute on the basis that 1t 1s to be presumed that the Parlianent has in fact 1ll-advisedly made such an assumption There 2S no merit in the erection of a curial ambush ot shibbolcths ir which even a Jegyi3slative intent evinced by words as clear

as those used in s.80(1)(c) of the Act would Jie entrapped

The question referred to the Court should be answered yes. I agree with the order for costs wnich the

rrecee tr ates area true cory nf the Taesers for Judgment herein ¢f his Honov

At a glance

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Before

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Judgment (128 paragraphs)