Trade or Commerce
25 Both parties agree that the principles to be applied are those laid down by the High Court in Concrete Constructions (NSW) Pty Ltd v Nelson (1990) 169 CLR 594, particularly in the judgment of Mason CJ, Deane, Dawson and Gaudron JJ, at 602-604. The general principle was stated in the following way (at 603):
"… 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." (footnote omitted)
26 This was further elucidated when their Honours said (at 604):
"… 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."
27 As Toohey J said, at 614:
"… 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."
28 Mr Nicholas QC, for the respondents, argued that the trading and commercial activities of the first respondent are the provision of the services and amenities of Canberra Airport and that s 52 is properly limited in its application to the conduct of the first respondent in its trading or commercial dealings with people in the course of the provision of those services and amenities. He put that the fact that the development of The Poplars is considered not to be in the best interests of the airport or of its profits was not to the point. He submitted that accepting that the representations were made for the business purposes of the first respondent, and, indeed, to protect the trading or commercial activities of it from being adversely affected in the future, this did not constitute conduct which, of its nature, bore such a trading or commercial character as to be within the essential conception of trade and commerce referred to by their Honours. The conduct of the first respondent was not towards persons with whom it has or may have dealings in the course of its central commercial activities or transactions, but was rather directed to the ratepayers and voters of Queanbeyan and, indirectly through them, the Council and the Minister.
29 Mr Ellicott QC, for the applicant, pointed to the fact that the High Court in Nelson (supra) contemplated that promotional activities in relation to, or for the purposes of, supply of goods and services to potential customers would be included, even though directed to an unidentifiable section of the public. He submitted that once the Council had passed the resolution on 3 March approving a draft Local Environmental Plan, the respondents set out on a course of conduct for the purpose of stopping the applicant's proposed residential subdivision in order to protect the first respondent's business and to ensure that it continued to trade profitably in the future. It was put that the respondents perceived that the proposed residential development would hinder the existing business and its proposed development of that business by reason of residents making complaint about the operation of the airport. These submissions as to the facts are plainly correct and are not really in dispute. Mr Ellicott then submits that these facts are indistinguishable in principle from those considered by Morling J in Glorie v WA Chip & Pulp Co Pty Ltd (1981) 55 FLR 310.
30 In that case, the respondents were sued as representatives of the Forest Products Association of Western Australia, an association of companies engaged in the timber and woodchipping industries. The Western Australian Forests Department joined with the association and its members in paying for the production of a documentary film called "Forests Forever", intended to explain to the public the basis upon which the Forests Department was managing the South West Forest for various uses, and as a renewable resource for commercial purposes. The critical factual findings made by his Honour on this issue were as follows (at 320):
"… He [counsel for the respondents] contended that the film was not exhibited in trade or commerce. He described the film as being in the nature of a political exercise. He argued that viewers of the film were addressed as members of the electorate with the object of educating them in matters of forest management so that they would become sympathetic to the industry. However, this submission does not take sufficient account of all the circumstances in which the film came to be made. The film was produced as part of the activities of the trade association of which the first respondent was a member. The impetus for its production came, in part, from the desire to answer criticism of the industry. It was prudent, if not necessary, that such criticism be answered in order that the commercial interests of members of the association might be protected. The evidence clearly shows that the production of the film was seen as a public relations exercise, which plainly it was. The involvement of the Forests Department in the production of the film did not make it any the less a trade or commercial activity of the association. The first respondent carries on substantial wood-chipping operations in Western Australia. The viability of those operations is almost totally dependent upon the supply of timber from the South West Forest. Public antipathy to the use of the forest as a source of supply of that timber could impose a serious threat to the company's future activities if it were to find expression in political or other pressure upon the government to change existing forestry management practices. Having regard to these considerations I am of the opinion that the film has been, and is intended to be exhibited in trade or commerce."
31 The gravamen of his Honour's reasoning is found later on the same page, where he said:
"… In the present case, a real reason for exhibiting the film was to protect indirectly the commercial interests of the members of the association, including the first respondent. In these circumstances, I think it is correct to characterize the exhibition of the film as being in trade or commerce."
32 Mr Nicholas sought to distinguish Glorie. I shall deal with that submission later. He then submitted that Glorie would have been decided differently if heard after the decision in Nelson. There is undoubtedly much to be said for this point of view, but, sitting as a single judge, I must have regard to the manner in which Glorie has been dealt with both in, and subsequent to, the decision in Nelson. Glorie was referred to by each of counsel for the appellant and the respondent in Nelson, but the only reference to it in the judgments is by McHugh J (who was in dissent) in the following way (at 619):
"… But if the conclusion that a section found in a Part enacted to protect consumers creates a cause of action against corporate consumers produces some surprise, it is no greater than the surprise that is produced by holding that s. 52 also regulates the conduct of a corporation in its relations with members of the community in their capacities as government officials, shareholders and environmentalists or electors: see Merman Pty. Ltd. v. Cockburn Cement Ltd.; Orison Pty. Ltd. v. Strategic Minerals Corporation N.L.; Glorie v. W.A. Chip & Pulp Co. Pty. Ltd." (footnotes omitted)
33 In Australian Federation of Consumer Organisations Inc v Tobacco Institute of Australia Ltd (1991) 27 FCR 149, Morling J was again the trial judge. The Tobacco Institute of Australia Ltd had published an advertisement in 1986 in several Australian newspapers on the topic of the health effects of passive smoking. The Australian Federation of Consumer Organisations Inc ("AFCO") complained that there were misleading statements in the advertisement. The advertisement was framed as "A message from those who do … to those who don't". It dealt with what is known as "passive smoking". It contended that there was little evidence and nothing which proved scientifically that cigarette smoke caused disease in non-smokers. It concluded in the following way:
"Alright, cigarette smoke may be annoying to some non-smokers, but how shall we deal with these problems? Confrontation? Segregation? Legislation?
No.
We think annoyance is neither a government nor a medical problem. It's a people problem. Smokers can help by being more considerate and responsible. Non-smokers can help by being more tolerant. And both groups can help by showing more respect for each others rights and feelings.
Don't let intolerant minority pressure groups use you to create divisions between Australians."
34 His Honour, after setting out the relevant passage from the majority judgment in Nelson, said (at 157):
"Cigarettes are articles of commerce and restrictions on their use by consumers may render them less attractive as such, resulting in adverse economic consequences for their manufacturers and distributors. No doubt the participation by a trading corporation in a debate on a matter of public or social controversy will often not be conduct in trade or commerce. But the publication of the advertisement in the present case should not be viewed in isolation. It was published by a trading corporation which, so it may be safely inferred, was concerned to ensure that the sale of cigarettes would not be adversely affected by a belief on the part of the public as to a possible causal link between cigarette smoke and disease in non-smokers. The existence of such a link, or of evidence suggesting it, could affect the sale of cigarettes in various ways, for example, public pressure to restrict the smoking of cigarettes in places where non-smokers are present.
The advertisement had the potential, and was no doubt intended, to protect the commercial interests of cigarette manufacturers and distributors. Accepting that conduct "in trade or commerce" is confined to conduct which is itself an aspect of activities which, of their nature, bear a commercial character I think the proper conclusion is that the publication of the advertisement was conduct "in trade or commerce". Advertising products for sale is an aspect or element of the selling of those products. The selling of the products is indisputably a trading or commercial activity. Advertising may serve a number of purposes. One purpose may be to refute criticism of the seller's products thus protecting the market for them. The advertisement published by the respondent was calculated to achieve such a purpose"
His Honour did not refer to Glorie but his reasoning is consistent with it.
35 On appeal to the Full Court (Tobacco Institute of Australia Ltd v Australian Federation of Consumer Organisations Inc (1992) 38 FCR 1) the decision below was upheld. Sheppard J did not examine the authorities on this point but concluded (at 16):
"… that the most likely reason for the publication of the advertisement was to promote or maintain sales of cigarettes for commercial reasons, ie gain. In my opinion this inference, if not the only one open, is the most compelling and the most likely."
36 Foster J said (at 25):
"… Even the most cursory reading of it would, in my view, have been sufficient to convey to an ordinary reader a message favourable to the consumption of cigarettes as an article of commerce. The advertisement was persuasive in tone. It sought to allay fears which it suggested were commonly and erroneously held that the inhalation of tobacco smoke in the air could be harmful. The name of the appellant, appearing as the authoriser of the advertisement, would, in my view, when coupled with its obvious message, be quite capable of conveying to such a reader that the appellant had a commercial interest in assuaging community concerns about the harmful effects of inhaling environmental tobacco smoke. The general tenor of the advertisement, its wide exposure, and the name of the appellant combine to create an irresistible impression that it was promotional material designed to advance the cause of cigarette smoking and to assist in the sale of cigarettes."
His Honour only referred to Nelson when considering the issue. Glorie was referred to by him but in passing and in another connection.
37 Hill J said (at 44):
"… it may be inferred, that the corporation which placed the advertisement did so to allay the fears of those who smoked and thus discourage them from quitting and to discourage those who did not smoke from applying pressure on those who did to reduce the occasions on which they smoked, or perhaps give up altogether. In either way the advertisement on its face was designed either to promote the further sale of cigarettes or to arrest a decline in such sales.
…
There can be no doubt that a corporation, 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."
The only reference that his Honour made to Glorie was in relation to another issue.
38 The effect of these two cases was summarised in the following way by Sackville J in Fasold v Roberts (1997) 70 FCR 489 at 531:
"A person undertaking public presentations, such as exhibiting films or publishing advertisements, engages in conduct in trade or commerce if the presentations are designed to advance or protect the commercial interests of the exhibitor or the publisher, or of trading entities represented by the exhibitor or publisher."
Mr Ellicott adopts this and says that the advertisements and interview here were plainly of that character.
39 Mr Nicholas contends that each of these cases stands for a narrower proposition, namely, that the presentations must be designed to actually promote the core commercial activities - in this case, the services provided by the airport. In my view, the decision in Glorie cannot be limited in the way proposed by Mr Nicholas. It is clear from the passages that I have set out from the judgment that the film in that case was a public relations exercise, designed to deflect criticism of the methods of logging which were being utilised, and was designed to counter public antipathy which might pose a serious threat to the company's future activities if it were to find expression in political or other pressure upon the government to change existing forestry management practices. In my view, this is properly seen as activity designed to protect the continuing operations of the company and its ability to log timber in the way it wished, rather than promoting the sale of timber.
40 Analysis of AFCO is a little more difficult. AFCO was decided after Nelson. All of their Honours brought the conduct under the promotion umbrella opened by the High Court and, in effect, concluded that the advertisement was a promotion for the sale of cigarettes. Mr Nicholas can certainly gain comfort from the manner in which their Honours expressed their respective reasons. However, the terms of the advertisement raise a question. I have set out what I regard as the most important parts of the advertisement above and a copy of the advertisement as it appeared can be seen at 38 FCR 21 in the judgment of Sheppard J. In my view, it is most naturally seen as a plea to non-smokers not to press for confrontation with or segregation of smokers particularly by legislation, rather than promotion of the sale of cigarettes. The message was that smokers should not support the pressure groups who were active in proposing regulatory controls upon smoking in public to government. It is odd that this aspect of the advertisement was not referred to by any of their Honours. I must take it that their Honours, for the purposes of the section, had regard to the indirect rather than the direct effect of the advertisement.
41 I have read both the decision of Sackville J in Fasold v Roberts (supra) and the decision on appeal sub.nom Plimer v Roberts (1997) 80 FCR 303 and, because of the very different factual basis, do not find them to be of any particular value in resolving the problem before me. I do note, however, that both Sackville J, and Lindgren J on appeal, refer to Glorie without any disapproval.
42 Glorie is a long-standing decision of this Court which did not receive any hint of disapproval in Nelson itself or any of the subsequent cases. If it were to be overruled, AFCO would have been an occasion to do so. On the other hand, it predates Nelson. The actual decision in AFCO proceeds on the basis that the conduct in question was the promotion of the sale of cigarettes, and was therefore consistent with Nelson. The correctness of Glorie on the present issue was not considered in any of the decisions to which I have referred.
43 In these circumstances, I am not relieved of the responsibility of deciding whether Glorie is consistent with Nelson. In my opinion, the better view is that it is not. A public relations exercise of the kind explained by Morling J cannot be categorised as the promotion of the sale of timber or as otherwise within the central conception of trade or commerce as explained by the High Court. It is not an aspect or element of transactions which of their nature bear a trading or commercial character. I cannot find the kind of indirect promotion of timber products in that case that was found about cigarettes in AFCO. That is certainly not the manner in which Morling J analysed the matter, as the passage cited above reveals.
44 Even if I be wrong about that, in my view the present conduct is one step removed from Glorie. In that case, it was the timber industry which was being promoted and explained. Here, the conduct is not directed to the trade or commerce associated with the airport at all - it is concerned with the potential subdivision of the applicant's land. Even if it were possible to categorise the conduct in Glorie as being the indirect promotion of timber products, the conduct here cannot be seen as the indirect promotion of the services provided by Canberra Airport. It was political in purpose and effect, albeit with the aim of protecting the business from interference in the future. In my opinion, to hold otherwise would be to ignore the reality that the High Court in Nelson made a deliberate choice between a wide and narrow view of the phrase "in trade or commerce" in s 52 and chose the latter.
45 Mr Ellicott advanced the alternative submission that the conduct complained of occurred in his client's trade and commerce, citing Meadow Gem Pty Ltd v ANZ Executors & Trustee Co Ltd [1994] ATPR (Digest) 53,626 and the reference to it by Sackville J in Fasold v Roberts (supra) at 531. I have considerable difficulty in accepting that as a matter of construction of s 52 a party may be in breach where that party is not a participant in the relevant trade or commerce. For example, I would not have thought that disparagement of goods manufactured by nuclear power by a conservationist with no commercial interest in the outcome would be caught by the section (cf Eighth SRJ Pty Ltd v Merity (1997) 7 BPR 15,189 at 15,203 (line 48)-15,204 (line 10)).
46 Meadow Gem was a strike-out application on the basis that no cause of action was disclosed, and so is of limited application. The plaintiff sued on assurances given by government representatives as to the solvency of the Pyramid Building Society Ltd ("Pyramid"). It was apparently conceded that conduct engaged in for the purpose of promoting the business (sic) for some other corporation would be caught, and it was held to be arguable that the statements were made with the intention of encouraging investors to maintain their trading relationship with Pyramid, citing Glorie and Meates v Attorney-General [1983] NZLR 308.
47 The concession would, no doubt, be correct if the representor was acting as agent for the corporation, or if it were acting in the course of its own business in making the representations. As counsel who made the concession in Meadow Gem relied upon Unilan Holdings Pty Ltd v Kerin (1992) 35 FCR 272, it is difficult to imagine a wider concession being made by him as it would have been in the teeth of the effect of Unilan as he put it. The authorities cited do not, in my opinion, assist. Glorie was a case where the party making the representations was, for all relevant purposes, the agent of the timber companies and, in any event, I have held the representations were not made in trade or commerce as now to be understood. The reference to Meates is puzzling, as that was a case of alleged negligent misstatement, having nothing to do with trade or commerce.
48 Whilst Meadow Gem may have been correct so far as a strike-out application was concerned, I cannot agree that the making of statements by a "detached … bystander who had conducted its own objective studies" but was not an agent of Pyramid would be in the trade or commerce of Pyramid. In the present case, this alternative argument is only being considered because I have held the conduct was not in the first respondent's trade or commerce. That being so, the first respondent is the equivalent of an officious bystander so far as the trade or commerce of the applicant is concerned.
49 In any event, I regard the question as academic in the present case. I cannot discern any relevant existing trade or commerce of the applicant. The applicant no doubt intends to dispose of its property to best commercial advantage. I have set out the effect of the evidence of Mr Larcombe on this issue. However, in the absence of a rezoning, it cannot be said that there is any relevant trade or commerce in the land, either in globo or in subdivided lots. It may be that some of the persons who read the first respondent's material are potential purchasers of the land - either in globo or in subdivision - if it comes onto the market. It may also be that some of them may retain a memory of these advertisements at that time. However, I do not regard that nexus as causing the conduct to be in any existing trade or commerce of the applicant. In some cases, there may be a nice question as to when trade or commerce begins, but potential trade or commerce is not sufficient. The objective of the relevant conduct of the respondents is to prevent rezoning. It is only upon rezoning that the potential for trade or commerce may be realised. I therefore do not need to decide the issues which would have arisen had there been a transaction or transactions in the land. That would have involved considering cases such as O'Brien v Smolonogov (1983) 53 ALR 107, Bevanere Pty Ltd v Lubidineuse (1985) 7 FCR 325, Argy v Blunts & Lane Cove Real Estate Pty Ltd (1990) 26 FCR 112 and Eighth SRJ Pty Ltd v Merity (supra), the first three of which predated Nelson.
50 Even if I be wrong in this, the publications were plainly made in order to influence the readers, as members of the community, for political purposes. Any effect upon them as potential purchasers would be a side wind. They were not made in relation to, or for the purposes of, the supply of goods or services to actual or potential customers as required by Nelson.