Plath v Snowy Monaro Regional Council

Some Principles from the Cases

1. In determining this appeal we have had regard to two decisions referred to by the parties, namely Murphy and J S McMillan.
2. In J S McMillan the question was whether the Commonwealth of Australia, through its business unit the Australian Government Publishing Service (AGPS), breached obligations under s 52 of the then Trade Practices Act 1974 (Cth) (the Trade Practices Act). That in turn involved the question of whether the Commonwealth was carrying on a business in relation to AGPS. The Court adopted the following statements of legal principles from other cases: 1. The expression "carry on business", in its ordinary meaning, signifies a course of conduct involving the performance of a succession of acts and not simply the effecting of one solitary transaction (Smith v Capewell (1979) 142 CLR 509 at 517); and 2. System and regularity are involved in the carrying on of a business but it does not necessarily follow that one who has transactions of the same kind systematically or regularly is carrying on a business in those transactions.
3. The Court found that the services which AGPS had been providing were services of the nature which an entity carrying on a business could well provide. There is a distinction between those functions of a Government which are purely governmental or regulatory and those functions which entail a carrying on of a business. In this case, the Commonwealth, in the guise of the Department of the Senate and the Department of the House of Representatives and other departments, was utilising the services provided or procured by AGPS, and in that context the Commonwealth is carrying out governmental functions. In its guise as AGPS the Commonwealth is doing what any citizen or private trader might do, namely providing those services for remuneration. The Court held that the Parliament intended to limit the extent to which the Commonwealth would be bound by the Trade Practices Act and did so by stating that the application of that Act to the Commonwealth applied only insofar as the Commonwealth carries on a business. The particular conduct impugned in this case was the conduct of the Commonwealth in issuing a request for tender and dealing with prospective tenderers concerning the purchase by a tenderer of aspects of the activities of AGPS. That conduct was not activity engaged in carrying on a business by the Commonwealth in the guise of the AGPS. The conduct in this case was not conduct to which the Trade Practices Act was applicable.
4. The decision of the Court of Appeal of Victoria in Murphy also dealt with the question of whether the Australian Consumer Law (ACL) (Sch 2 Vol 3 of the Competition and Consumer Act 2010, which is the Trade Practices Act renamed from 1 January 2011) was applicable to the conduct of a statutory corporation. The Court set out and approved a number of propositions put forward by the trial Judge concerning the question of whether the relevant conduct was conduct engaged in as part of the carrying on of a business ([46]-[50]). These propositions included: "[46] … (a) For activities to constitute "carrying on a business", the activities must be undertaken in a commercial enterprise or as a going concern. The activities must constitute trade, or commercial transactions or engagements. A business activity is an activity which takes place in a business context and which, of itself, bears a business character. (b) The expression "carry on a business" signifies a course of conduct involving the performance of a succession of acts with system and regularity, not the effecting of a solitary transaction. The less commercial the character and objectives of an organisation, the greater the degree of system and regularity required to establish that it carries on a business. (c) On the other hand, mere repetitiveness is insufficient. It does not necessarily follow that one who engages in transactions of the same kind systematically or regularly is carrying on a business in those transactions (eg regular deposits into a bank account). Absence of a system and regularity might deny that a business is being carried on but their presence does not necessarily establish that it is. (d) There is a distinction between those functions of a government which are purely governmental or regulatory and those functions which entail the carrying on of business. To carry on some part of 'the business of government' is something different from carrying on a business in the relevant sense. (e) The carrying out of a function of government in the interests of the community, such as the performance of a statutory function (including one in respect of which fees may be charged), is not the carrying on of a business. That the purpose of the activities is the provision of governmental services will tend against a conclusion that they amount to the carrying on of a business. (f) There must be present some element of commerce or trade such as a private citizen or trader might undertake. … [49] Secondly, based on observations of Emmet J in J S McMillan Pty Ltd v Commonwealth, the judge identified what his Honour described as three important limitations inherent in s 18 of the ACL: 1) First, the focus must be on the impugned conduct: the impugned conduct must be engaged in in the course of carrying on the business. 2) Secondly, and consequently, it is not sufficient that the impugned conduct be connected in some way with a business to be conducted by the State at some time in the future; and activities preparatory to the establishment of a business do not constitute the commencement of or the carrying on of a business. 3)Thirdly, the activity in the course of which the impugned conduct occurs must properly be characterizable as "carrying on a business"." (citations omitted) The principles relevant to determining whether specified conduct can be characterised as "carrying on a business" for the purposes of consumer law have been discussed in numerous cases since J S McMillan. See for example Corrections Corporation of Australia Pty Ltd v Commonwealth (2000) 104 FCR 448; [2000] FCA 1280 at [12]-[16]; Sirway Asia Pacific Pty Ltd v Commonwealth [2002] FCA 1152 at [56]; Salvation Army (New South Wales) Property Trust v Commonwealth [2015] FCA 674 at [11]-[14]; and most recently in Roo Roofing Pty Ltd v Commonwealth [2019] VSC 331 at [586]ff.

The Reasoning in the Decision

1. Although we have summarised the reasons contained in the Decision earlier in this decision, it is necessary to add that the Decision contains the following findings significant to our decision: 1. The provision of the relevant activities charged by the respondent were services for which the respondent was entitled to make an annual charge pursuant to s 501(1) of the LG Act [73]. Such a charge is able to be levied on an annual basis in accordance with s 501(3) [73]. The charges are distinguishable from rates that the respondent is able to levy under s 497; and 2. The services performed by the respondent were performed under its statutory obligations as a local authority and do not have a commercial character [79]. In providing the relevant services the respondent was not undertaking business activities [80]. The respondent is charged with a responsibility under the LG Act to provide waste management services and responsibility for onsite sewerage services. Those services are not charged on a fee for service, but by way of an annual levy whether the ratepayer makes use of the services or not. The charges are relevant to the costs of the respondent's obligations under the LG Act for public health and environmental regulation [80]. Nor do the services fit within the definition of services as contained in s 79F of the FT Act [81].

The Fair Trading Act 1987 (FT Act)

1. Section 3 of the FT Act provides that the Act binds the Crown in right of the State insofar as the Crown in right of the State "carries on business, whether directly or by an authority of the State". Consumer claims and this Tribunal's authority to determine consumer claims are regulated in Part 6A of the FT Act. As stated earlier, it is a necessary element of a consumer claim that the supply of goods or services be by a supplier. That is a person who "in the course of carrying on (or purporting to carry on) a business, supplies goods or services (s 79D). It is necessary, having regard to s 3 and to s79D, to find that the respondent is carrying on a business.

The Impugned Services

1. The services giving rise to the charges which the appellant finds objectionable have been explained in some detail in a letter dated 2 August 2018 from the respondent. That letter formed part of an agreed bundle of documents provided by the parties to this appeal and the facts contained in the letter were not the subject of any objection by the parties. That letter states that the charge for the onsite sewerage management system is a renewal fee for the approval to operate. The charge in this case relates to two onsite sewerage management systems on the appellant's property. The letter also states that in respect of the waste management charge, the respondent makes an annual charge levied on all rateable properties to cover the provision of certain facilities. The letter describes those facilities or services as recycling collection points, transfer stations, illegal dumping clean-up, land fill restoration and rehabilitation, public education expenses, and administrative and management costs.
2. The appellant submits that the authority to charge for the two impugned services arises out of s 501 of the LG Act. That section provides that a council may make an annual charge for any of the following services "provided or proposed to be provided, on an annual basis by the council". The services listed include sewerage services and waste management services.
3. However, one of the points made by the appellant is that s 501 only permits a charge to be made for services provided or proposed to be provided rather than services which are available. That submission is not relevant to this appeal as it is a submission which does not go to the question of whether the Tribunal has jurisdiction but rather goes to the basis of whether the charge made by the respondent is in fact authorised by s 501 or not.
4. The respondent submitted that the onsite sewerage services are performed by the respondent pursuant to ss 68 and 113 of the LG Act whereas the waste management services are performed pursuant to s 24.
5. Insofar as the onsite sewerage services are performed by the respondent pursuant to ss 68 and 113, it is relevant that s 68 is a section which prohibits identified activity unless prior approval of the respondent has been given. Section 113 requires a record to be maintained of approvals given. Section 24 of the LG Act provides that the council may provide goods and services but does not mandate that the council does so.
6. The appellant relied on evidence concerning the respondent's overall activities in support of the submission that the respondent was carrying on a business. The evidence included evidence as to the respondent's "vision and values statement" and that the respondent manages its affairs having regard to the principles of sound financial management. The evidence included evidence from the respondent's accounts concerning profits earned and retained. In our view, such evidence is not persuasive in determining whether the impugned services were provided (or made available) by the respondent in the course of carrying on a business. As stated in Murphy, the focus must be on the impugned conduct. Accordingly, we will consider the issues before us having regard to that focus. It is convenient to deal with the two charges separately and we will deal with the onsite sewerage management system approval first.
7. The onsite sewerage management system approval charge arises out of the council's obligation to consider applications for approval under s 68. There is a statutory obligation to maintain a record (s 113). In our view, these functions do not have the characteristics which enable the services to be fairly described as performed in the course of carrying on a business. Rather, in our opinion, the service is one which appears to be governmental or regulatory in that it regulates an activity which must only take place with prior approval of the respondent. The provision of the renewal charge has the characteristics of the provision of a governmental or regulatory service designed to regulate the activity (presumably for reasons of public safety and considerations of health) rather than having the characterisation of a commercial activity. These conclusions are consistent with the approach and analysis contained in decisions including but not limited to Murphy, J S McMillan, and those cited above in [23].
8. Turning now to the other charges we note that the parties agree that the charge for waste management arises as a consequence of the council exercising its discretionary function under s 24. From the letter from the respondent dated 2 August 2018, the charge is made in respect of the provision of certain facilities. The appellant says that the facilities are available rather than provided to the appellant. That fact appears to us to indicate that this service is provided by the respondent in its capacity of offering governmental services rather than in the course of carrying on a business. The respondent is making a charge upon all "rateable assessments" (to quote the letter from the respondent dated 2 August 2018) which we would understand to include ratepayers. Some ratepayers will use the services very little (or not at all) and others will use them a lot. In our view, the provision of these facilities do not have the characteristics of the respondent being engaged in a commercial activity such that the respondent could be described as carrying on a business in respect of waste management.
9. The appellant sought to argue that an indicia of governmental services is that they are mandated and an indicia of services provided in the course of carrying on a business are that they are discretionary. In Mid Density Development Pty Limited v Rockdale Municipal Council (1992) 39 FCR 579; [1992] FCA 1036, the Court was asked to consider whether the provision of a s 149 certificate under the Environmental and Planning Assessment Act 1979 (NSW) was subject to the obligations contained in s 52 of the then Trade Practices Act. That in turn involved a consideration of whether the council was engaged in the conduct of a business in the provision of such certificates. The Court held that the carrying out of a function of government in the interests of the community is not a trading activity. A submission was put to the Court that a charge for an expedited certificate was discretionary and therefore the provision of such certificate was a trading activity. Notwithstanding that the charge may have been discretionary, the Court held that council was engaged in the performance of a statutory duty in respect of which the relevant act permitted the charging of fees.
10. In our view, the fact that the respondent is authorised by s 24 to engage in certain activities, but not mandated to do so, does not necessarily result in the conclusion that the impugned service is provided in the course of the respondent conducting a business. Rather, the characteristic of the service as a whole needs to be considered. Having regard to the indicia set out in J S McMillian and Murphy and other case law applying these indicia, we are of the opinion that that service is in the nature of a governmental service intended to support the council's objectives outlined in the LG Act. Indeed s 24 limits the services which the section authorises the respondent to engage in to those "appropriate to the current and future needs within its local community and of the wider public". Such services do not have the character of a commercial enterprise or a business character (using the language from Murphy). Rather, they have the character of the performance of a statutory function. Because the respondent has a discretion as to whether it will provide the services and, if so, the extent, or to whom, does not thereby make the service one which is provided in the course of carrying on a business. It is also difficult in our view to argue that the impugned services (being services appropriate to the current and future needs within its local community and of the wider public) are services made in the course of carrying on a business because a business would not necessarily have regard to community needs as opposed to having regard to what the community is willing to acquire.
11. Finally, we see no error in the reasoning contained in the Decision including in the application of the legal principles identified in the Decision. Nothing turns on the fact that our reasoning is expressed differently from the reasoning contained in the Decision because we have come to the conclusion that the decision to dismiss the application for want of jurisdiction was the correct decision. Given our conclusion on jurisdiction, it is not necessary to express a view as to whether the Decision was in error in stating that the services did not fit within the definition of s 79F of the FT Act.
12. The above reasoning disposes of Grounds 2 to 5 of the Grounds of Appeal. With respect to Ground 1, in our view, nothing turns on the fact that the Decision contained references to the ACL. The basis of the Decision was not dependent upon any aspect of the ACL and therefore, to the extent that references to the ACL were irrelevant, those references do not affect the decision to dismiss the application.
13. As we have dismissed each of the Grounds of Appeal, the appropriate order is that the appeal be dismissed. An order to that effect is made.
14. We express the tentative view that there should be no order for costs of the appeal. This is because: 1. The respondent has not sought costs; 2. Section 60 of the NCAT Act provides that each party should pay its own costs unless special circumstances exist. We express the tentative view, subject to any submissions which the respondent wishes to put forward, that special circumstances would not seem to arise; and 3. Rule 38 of the Civil and Administrative Tribunal Rules 2014 does not apply in this case.
15. However, if the respondent wishes to seek costs, it must file and serve submissions within 21 days and the appellant will be given the same period to respond. Directions dealing with costs have been included in the orders below.

Orders

1. The Appeal Panel makes the following orders: 1. Appeal dismissed; 2. Any application by the respondent for an order that costs of the appeal be paid by the appellant must be filed and served within 21 days of the date of these orders; 3. If the respondent files and serves submissions for an order for costs, the appellant has 21 days to file and serve his submissions in opposition to the application for a costs order; and 4. The submissions of both parties should include a submission as to whether it is appropriate for the Appeal Panel to determine costs on the papers and dispense with a hearing under s 50(3) of the NCAT Act.

I hereby certify that this is a true and accurate record of the reasons for decision of the New South Wales Civil and Administrative Tribunal. Registrar I hereby certify that this is a true and accurate record of the reasons for decision of the Civil and Administrative Tribunal of New South Wales. Registrar DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 04 July 2019