Trade or commerce
77 The words "trade" and "commerce" have been said to have about them a "chameleon-like hue": Concrete Constructions (NSW) Pty Ltd v Nelson (1990) 169 CLR 594 at 603 per Mason CJ, Deane, Dawson and Gaudron JJ ("Concrete Constructions"). That conduct which falls within the phrase "trade or commerce" and that which falls outside the phrase has been productive of some uncertainty. But that which is certain is that not all conduct engaged in by a corporation which is involved in trading or commercial activities is necessarily conduct "in trade or commerce".
78 When addressing s 52 of the former Trade Practices Act 1974 (Cth), Mason CJ, Deane, Dawson and Gaudron JJ in Concrete Constructions (1990) 169 CLR 594 at 602 to 604 set forth some general guidelines as follows:
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 N.S.W. v The Commonwealth [(1948) 76 CLR 1 at 381], 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. The scope of the prohibition imposed by s. 52 is, however, governed not only by "the terms in which it is created" but by "the context in which it is found" … In that regard, it is of particular significance that the words "trade" and "commerce" have "about them a chameleon-like hue, readily adapting themselves to their surroundings" (O'Brien v Smolonogov [(1983) 53 ALR 107 at 113], quoting Federal Commissioner of Taxation v Whitfords Beach Pty Ltd [(1982) 150 CLR 355 at 378 to 379]). Section 52(2) precludes limiting the scope of s. 52(1) by implication drawn from the contents of other provisions of Pt V. 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. Indeed, in the context of Pt V of the Act with its heading "Consumer Protection", it is plain that s. 52 was not intended to extend to all conduct, regardless of its nature, in which a corporation might engage in the course of, or for the purposes of, its overall trading or commercial business. Put differently, the 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. The point can be illustrated by reference to the examples mentioned above. The driving of a truck for the delivery of goods to a consumer and the construction of a building for another pursuant to a building contract are, no doubt, trade or commerce in so far as the relationship between supplier and actual or potential customer or between builder and building owner is concerned. That being so, to drive a truck with a competitor's name upon it in order to mislead the customer or to conceal a defect in a building for the purpose of deceiving the building owner may well constitute misleading or deceptive conduct "in trade or commerce" for the purposes of s. 52. On the other hand, the mere driving of a truck or construction of a building is not, without more, trade or commerce and to engage in conduct in the course of those activities which is divorced from any relevant actual or potential trading or commercial relationship or dealing will not, of itself, constitute conduct "in trade or commerce" for the purposes of that section. That being so, the giving of a misleading handsignal by the driver of one of its trucks is not, in the relevant sense, conduct by a corporation "in trade or commerce". Nor, without more, is a misleading statement by one of a building company's own employees to another employee in the course of their ordinary activities. The position might well be different if the misleading statement was made in the course of, or for the purposes of, some trading or commercial dealing between the corporation and the particular employee.
79 For present purposes, it is concluded that a decision to terminate the services of an employee upon the bases expressed by Ms Pickles is not conduct "in trade or commerce" within the meaning of ss 20 or 21 of the Australian Consumer Law.
80 The authorities, however, do not all speak with one voice.
81 The preferable line of authority, it is respectfully considered, may conveniently start with Mulcahy v Hydro-Electric Commission (1998) 85 FCR 170. Former employees of the Commission had there commenced a proceeding in which reliance was placed (inter alia) upon the Trade Practices Act and the Fair Trading Act 1990 (Tas). Heerey J concluded that "the relationship between the Hydro and each of the applicants was that of employer and employee": (1998) 85 FCR at 213. However, in rejecting the misleading and deceptive conduct claim, his Honour also concluded that there "were no trade or commercial dealings between them in the relevant sense": (1998) 85 FCR at 213.
82 His Honour reached a similar conclusion in Martin v Tasmania Development and Resources [1999] FCA 593, (1999) 163 ALR 79. An employee's services had there been terminated. Reliance upon s 52 of the Trade Practices Act was rejected. In so concluding, Heerey J referred to Concrete Constructions and continued as follows:
[77] … The majority in that case clearly rejected the wider construction of "in trade or commerce", which would extend to virtually any activity of a corporation. It is true that a building company could not earn income unless it had workers who received instructions from foremen. But that was not enough to bring the alleged misrepresentation within the concept of "trade or commerce". Similarly, [Tasmania Development and Resources] could not carry out its activities of promoting Tasmanian trade and development (which activities themselves I assume for present purposes to be in trade or commerce) unless it engaged staff. Nevertheless such engagements and the necessary associated incidental negotiations, however necessary, are not in themselves of a trading or commercial nature. They are internal affairs of [Tasmania Development and Resources].
83 After citing Concrete Constructions, Rothman J in Downe v Sydney West Area Health Service (No 2) [2008] NSWSC 159, (2008) 71 NSWLR 633 at 649 similarly concluded as follows in respect to a claim raised by Dr Downe as to a contravention of s 51AA of the Trade Practices Act:
[232] While it is arguable that the removal of the Director of a Unit, providing services to the public, which Director was providing those services, may be an act in trade or commerce, on current authority, the act in trade or commerce is the impact upon the public, not the treatment of the employee. In the present situation, the relationship between the Health Service and Dr Downe was that of employer and employee. Dr Downe has failed to prove that there were trade or commercial dealings, as explained in Concrete Constructions v Nelson, between her and the Health Service in any relevant sense. Section 51AA of the Trade Practices Act (Cth) does not apply to the conduct of the Health Service in relation to Dr Downe.
Although unnecessary to do so, his Honour further expressed the following conclusion in respect to that claim (at 647):
[237] In the current proceedings, Dr Downe does not point to any special disability that prevented her from exercising her own mind and making a judgement as to her own best interests. It is unnecessary, despite the request so to do, in those circumstances, and because of the earlier conclusion as to the applicability of the Trade Practices Act (Cth), to discuss whether s 51AA of the Trade Practices Act (Cth) is confined to the equitable remedy for unconscionable conduct or provides a broader remedy, provided by the Trade Practices Act (Cth), where unconscionable conduct exists and in which equity would grant some relief, eg estoppel: see GPG (Australia Trading) Pty Ltd v GIO Australia Holdings Ltd (2001) 117 FCR 23 at [113]-[126], per Gyles J and the cases therein cited.
84 In respect to what was characterised as an "alternative claim" under the former s 51AC of the Trade Practices Act, in Macdonald v Australian Wool Innovation Ltd [2005] FCA 105 ("Macdonald") Weinberg J concluded:
[279] The applicants also failed to make good their other alternative claim under s 51AC. There was nothing to suggest that they laboured under any special disability, or were placed in some special situation of disadvantage. They were both intelligent and experienced men, professional and highly educated, perfectly well able to look after their own interests. In hindsight, they acted with perhaps less prudence than they might have done. That is a far cry from making good a claim of unconscionability.
[280] It goes without saying that Mr Dorber's opinion that AWI had acted unconscionably towards the applicants by failing to discharge its obligations under the contract has no particular legal significance. Any promise that is deliberately broken could easily be characterised as "unconscionable". That is not the sense in which the term is used in s 51AC.
[281] It follows that had the applicants relied solely upon their claim of unconscionability, they would have failed.
85 The contrary view, and the view relied upon by Counsel on behalf of Mr Robinson, was that of Wilcox J in Barto v GPR Management Services Pty Ltd (1991) 33 FCR 389. His Honour there also referred to the observations expressed by the majority in Concrete Constructions and continued (at 393):
I admit to some difficulty in discerning precisely what activities the majority would regard as being "in trade or commerce" and what activities it would not. It is clear enough, on the one extreme, that conduct which is not inherently a commercial activity, such as driving a truck or giving information about the safety of a building site, is not conduct "in trade or commerce" simply because, in the particular case, it is performed in the course of a larger activity for commercial gain. It seems equally clear, on the other extreme, that conduct which would plainly be conduct "in trade or commerce" if carried out vis-à-vis a stranger does not lose that characteristic simply because the party with whom the corporation is dealing happens to be an employee. To take an example mentioned in argument in this case: if a company which carried on business as a car dealer sold a motor car to an employee, that would be conduct "in trade or commerce", so the company could be make liable under s 52 in respect of any loss-causing misrepresentations. It is true that, in one sense, the transaction is an "internal" one. But the Concrete Constructions majority expressly left open the position "if the misleading statement was made in the course of, or for the purposes of, some trading or commercial dealing between the corporation and the particular employee".
86 In the absence of any binding decision of this Court it is concluded that the views of Heerey and Rothman JJ should prevail. Those views, it is respectfully considered, are more in accordance with the observations of the majority in Concrete Constructions and the generally expressed principle that all activities of a corporation otherwise engaged in trading or commercial activities are not for that reason alone "in trade or commerce". Some activities of a corporation remain "internal" to the corporation and fall outside the rubric of "trade or commerce" and remain properly characterised as personal to the relationship of employer and employee.