1. The jurisdictional hearing on 23 April 2010 in this proceeding concerned the following issue : when a solicitor writes to the Registrar of Titles giving notice, under section 89A(3) of the Transfer of Land Act 1958, that proceedings are on foot in a court to substantiate the claim of a caveator, does the solicitor thereby engage in conduct "in trade or commerce"?

2. If the answer is "yes", VCAT has jurisdiction to hear and determine this proceeding, which the applicant Seachange Management Pty Ltd ("Seachange") has brought against the respondents, Madgwicks (a firm) and Catherine Ballantyne. Madgwicks is the firm of solicitors which wrote and set the letter. Ms Ballantyne signed it. Seachange has alleged that Madgwicks thereby contravened provisions of the Fair Trading Act 1999 which prohibit a person from engaging in certain conduct "in trade or commerce", that Ms Ballantyne was a person "involved" in the contravention within the meaning of the Fair Trading Act, and that it suffered loss and damage as a result of the contravening conduct. It has brought this proceeding pursuant to section 159 of the Fair Trading Act, which provides (so far as is relevant):

1. Action for damages * (1) A person who suffers loss, injury or damage because of a contravention of a provision of this Act may recover the amount of the loss or damage or damages in respect of the injury by proceeding against any person who contravened the provision or was involved in the contravention.

(2) A proceeding under this section may be brought before the Tribunal or in any court of competent jurisdiction.

1. On 23 April 2010 I decided that the answer to the question was "no", and ordered that the proceeding was struck out for want of jurisdiction. I gave oral reasons for my decision. Seachange required written reasons. These are the reasons.

2. The principal provision of the Fair Trading Act which Seachange alleges that Madgwicks contravened is section 9(1), which provides:

(1) A person must not, in trade or commence, engage in conduct that is misleading or deceptive or is likely to mislead or deceive.

At one point during the jurisdictional hearing Mr De Simone, Seachange's director who appeared on its behalf, indicated that Seachange also wanted to contend that Madgwicks' writing and sending of the letter amounted to "unconscionable" conduct in contravention of other provisions of the Fair Trading Act. The sections which prohibit unconscionable conduct of one kind or another are sections 7, 8 and 8A. Each of them prohibits a person, "in trade or commerce", from engaging in unconscionable conduct of a particular kind or in connection with the supply or purchase of goods or services of a particular kind. I do not think that Madgwicks' conduct in this case could possibly be brought within the scope of any of those kinds of conduct. That issue, however, did not arise during the jurisdictional hearing. But, as in relation to section 9(1), the issue of whether the conduct occurred "in trade or commerce" did arise. Once that issue is determined by the answer "no", there is no need to consider further the possible application to this case of any of sections 7, 8 or 8A.

Except for the facts which would prove the loss and damage which Seachange alleges, most of the relevant facts were set out in an affidavit of Ms Ballantyne sworn on 22 April 2010 and filed.

Seachange is the registered proprietor of land in Ocean Grove described in Certificate of Title volume 10987 folio 285 ("the land"). On 24 July 2009 Pital Business Pty Ltd ("Pital") lodged a caveat no. AG 650181S with the Registrar of Titles claiming an equitable estate or interest in the land. The grounds for a claim to the equitable estate or interest were stated in the caveat to be that Seachange held the land on a resulting trust, alternatively a constructive trust, for Pital.

Section 89A(1) and (2) of the Transfer of Land Act enable a person interested in the land described in a caveat to make an application to the Registrar for service of a notice to the caveator under sub-section (3), supported by a legal practitioner's certificate of opinion that the caveator does not have the estate or interest claimed in the caveat. Evidently Seachange made such an application, supported by such a certificate.

Section 89A(3), (4) and (5) deal with the effect of such an application and what the Registrar must do upon having received it. Those sub-sections provide:

(3) Upon receiving any such application and certificate and upon being satisfied that the applicant has an interest in the land in respect of which the application is made, the Registrar shall give notice to the caveator that the caveat will lapse as to the land and the estate or interest therein in respect of which the application is made on a day specified in the notice unless in the meantime either -

(a) the application is abandoned by notice in writing given to the Registrar by or on behalf of the applicant; or

(b) notice in writing is given to the Registrar that proceedings in a court of competent jurisdiction to substantiate the claim of the caveator in relation to the land and the estate or interest therein in respect of which the application is made are on foot.

(4) The Registrar shall not cause a day to be specified in the notice that is less than 35 days after the day on which the notice is served or, if the notice is sent by post, the day on which it is introduced into the course of post.

(a) the application has been abandoned as aforesaid; or

(b) notice in writing has been given to the Registrar that proceedings as aforesaid are on foot -

the caveat shall lapse as to the land and the estate or interest therein to which the application then relates, and the Registrar shall make all necessary amendments in the Register.

1. On 31 July 2009 the Registrar wrote to Pital giving the notice required by sub-section (3). The letter giving the notice was sent to Madgwicks' office, which was the address for service which Pital had specified in the caveat. Madgwicks, however, had not lodged the caveat. Pital had done that itself. The notice specified 8 September 2009 as the date upon which the caveat would lapse unless before that date the application had been abandoned or notice had been given to the Registrar that proceedings were on foot to substantiate Pital's claim in the caveat.

2. On 7 September 2009 Madgwicks wrote and delivered to 'Warrants Office, Land Victoria' the letter which Seachange has alleged amounted to conduct in contravention of provisions of the Fair Trading Act. The letter purported to be the notice in writing to the Registrar of Titles referred to in section 89A(3) and (5) of the Transfer of Land Act, and it seems that the Registrar accepted it as such and acted upon it. The letter identified the caveat, stated that Madgwicks acted on behalf of the caveator Pital, and went on to say:

We provide notice of the following pursuant to section 89A(3) of the Transfer of Land Act 1958:

1. That proceedings are on foot;
2. In a Court of competent jurisdiction;
3. To substantiate the claim of the caveator in relation to the land and the estate or interest in respect of which the above application has been made; and
4. The Court reference to the proceedings is Supreme Court proceedings number 8753 of 2009.
5. Ms Ballantyne did not exhibit to her affidavit either the letter dated 7 September 2009 or the writ in the Supreme Court proceedings referred to in the letter. During the jurisdictional hearing, however, Mr Kohn of Counsel, who appeared for the respondents, produced those two documents to me when Mr De Simone called upon the respondents to produce them.

6. Seachange's complaint about the letter is that the Supreme Court writ did not, and did not attempt to, "substantiate the claim of the caveator", but made a monetary claim only. An examination of the Statement of Claim annexed to the writ reveals that the complaint may well be justified and that the letter may have been part of misleading or deceptive conduct. Of course I did not and do not attempt to decide whether that was so. What I had to decide was whether, however the conduct ought be characterised, it occurred "in trade or commerce".
7. Once the Registrar received and acted upon the letter dated 7 September 2009, the caveat did not lapse on 8 September 2009 but remained in the Register.

On 24 December 2009 Madgwicks filed a notice of discontinuance of the Supreme Court proceeding.

In this proceeding Seachange has claimed $9,000.00, which it alleges was the amount of legal costs that it incurred, both before and after the discontinuance on 24 December 2009, in achieving an eventual removal of the caveat.

Before submitting that the conduct engaged in by Madgwicks was not "in trade or commerce" and so could not amount to a contravention of section 9 or of any other relevant section of the Fair Trading Act, Mr Kohn made other submissions to the effect that Seachange's proceeding was not properly brought pursuant to section 159 of that Act so as to attract VCAT's jurisdiction. (There was not, and could not have been, any contention that the proceedings attracted the jurisdiction which Part 9 of that Act confers upon VCAT.) Those other submissions were that Seachange was improperly attempting to clothe in the guise of a claim under section 159 claims which could and properly should be made in other ways but not in a VCAT proceeding. I rejected those other submissions.

First, Mr Kohn submitted that the proper course open to a person in Seachange's position was to make a claim for compensation under section 118 of the Transfer of Land Act, which provides that any person lodging a caveat without reasonable cause is liable to make compensation to a person who sustained damage thereby. Certainly Seachange could make such a claim against Pital of it sees fit to make one, but it chose to make a claim against Pital's solicitors. It could not make a claim against Madgwicks under section 118 because Madgwicks did not lodge the caveat. Moreover the claim in this proceeding was not that the caveat was lodged without reasonable cause. The claim was that a letter to the Registrar of Titles contained incorrect information and caused the caveat not to lapse. The claim simply did not correspond in any way to a claim which might be made under section 118.

Secondly, Mr Kohn submitted that, following the discontinuance of the Supreme Court proceeding, Seachange had a right under Rule 63.15 of the Supreme Court Rules to claim the costs of the proceeding and, if it wanted to contend that Madgwicks had caused costs to be incurred improperly or without reasonable cause, it could claim costs against Madgwicks under Rule 6.3.23(1). For several reasons, there is again no correspondence between the claim made in this VCAT proceeding and any claim which Seachange might have available to it under Supreme Court Rule 63. In the first place, a claim under rule 63.15 could be made only against Pital. In the second place, the question of whether the solicitors Madgwicks had acted improperly in the proceeding might be confined to a question of whether the filing of the writ was improper. That is a different question from whether notifying the Registrar of Titles that the writ sought to substantiate the claim of a caveator was improper. In the third place, even if Seachange could make a claim for indemnity costs of the proceeding, it is doubtful whether it would be entitled to costs incurred after the date of the discontinuance. The legal costs of $9,000.00 which Seachange alleged were loss and damage and which it claimed in this proceeding included costs incurred after the date of discontinuance. In the fourth place, Rule 63 does not make available any claim against Ms Ballantyne personally, as Seachange sought to make.

Rejection of those other submissions cleared the way for a consideration of whether Madgwicks engaged in the conduct complained of "in trade or commerce".

Apart from stating in section 3 that "trade or commerce" includes a business not carried on for profit, the Fair Trading Act does not illuminate the phrase "in trade or commerce." A guide to the limits of the phrase has been given, however, in well known passage from the majority judgment of the High Court in Concrete Constructions (New South Wales) Pty Ltd v Nelson [1990] HCA 17; (1990) 169 CLR 594 at 604. The High Court was dealing with section 52 of the Trade Practices Act 1974 (Commonwealth), which is the analogue of section 9 of the Fair Trading Act except that the Commonwealth Act refers to a "corporation", not to a "person." The High Court stated that section 52 is concerned with

...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.

One must, therefore, discern the character of the activity or transaction in the course of which conduct takes place in order to determine whether a person who engages in that conduct is doing so "in trade or commerce." If the activity or the transaction bears a trading or commercial character, the conduct will probably take place "in trade or commerce."

So, when deciding whether a solicitor who writes and sends a letter is engaging in conduct "in trade or commerce", one must consider the context in which the letter was written and sent and the nature of the person to whom the letter was sent. When a client retains a solicitor, and the solicitor deals with the client, the relationship is a commercial one and the dealing takes place in a commercial context. When the solicitor writes a letter or otherwise acts in accordance with the client's instructions, the solicitor does so because that commercial relationship exists. It does not follow, however, that the solicitor is engaging in conduct "in trade or commerce" by writing the letter or otherwise acting in accordance with the instructions.

The context in which Madgwicks wrote the letter and sent it to the Registrar of Titles was the statutory framework of section 89A of the Transfer of Land Act whereby the Registrar is required to give a particular kind of notice to a caveator and to act upon another particular kind of notice that proceedings to substantiate a caveator's claim are on foot. The letter was designed to set in train and did set in train the Registrar's performance of a statutory function. That kind of interaction between the solicitor and the Registrar did not bear a trading or commercial character.

The facts of this case bear some similarity to, but really are in contrast with, the facts in L.T. King Pty Ltd v Besser [2002] VSC 354, a decision of Osborn J. of the Supreme Court of Victoria. That case also concerned a solicitor's letter, which was alleged to have amounted to misleading or deceptive conduct in trade or commerce in contravention of section 52 of the Trade Practices Act. Solicitor A acted for the defendant and solicitor B acted for the plaintiffs. Solicitor A wrote to solicitor B a letter by email which stated that solicitor A held sufficient funds to cover the amount of a debt which the plaintiff alleged that the defendant owed. In fact solicitor A did not hold funds, but had received a cheque from the defendant subject to instructions as to when it might be cleared. Comforted by the letter, the plaintiffs paid away money to third persons, believing the money was covered by funds held by solicitor A. One of the claims which the plaintiffs made in the proceeding was that they had suffered loss and damage as a result of relying upon the email letter. They sued solicitor A for that loss and damage.

Osborn J. decided that the conduct that was complained of was properly characterised as conduct "in trade or commerce" and was misleading or deceptive in contravention of section 52 of the Trade Practices Act. His Honour found that solicitor A was engaged in the completion of a commercial transaction on behalf of its client (paragraph [39]) and completed a summary (at paragraph [24]) of his conclusion as follows:

In the present case it is sufficient to conclude the essential character of the conduct in issue was commercial being a communication prior to settlement (in a non-litigious context) of the payment of moneys outstanding under a loan agreement and associated costs.

1. The case surveyed in some detail the law on the subject of whether, and if so in what circumstances, legal practitioners act "in trade or commerce." There is no need for me to get into the detail. I need only observe that the survey demonstrated that, just as it is wrong to say that a lawyer never acts "in trade or commerce", it is also wrong to say that whatever a lawyer does for a client is always done "in trade or commerce."

2. In the present case, the communication from Madgwicks to the Registrar of Titles was neither completing nor furthering a commercial transaction. The context was not commercial. The context was the statutory obligation cast upon a public statutory appointee, the Registrar of Titles, when given notice of the kind that the communication gave. The activity of giving that notice, to enliven the performance of the statutory obligation, did not bear a trading or commercial character. By making the communication Madgwicks were not engaging in conduct "in trade or commerce."

3. There having been no arguable contravention of a provision of the Fair Trading Act, the proceeding cannot attract the jurisdiction which section 159 confers upon VCAT. So the proceeding had to be struck out for want of jurisdiction, and I so ordered.