Tender Center Pty Ltd v Department of Fair Trading

PARTIES : Tender Center Pty Limited (Plaintiff) The Director-General of the Department of Fair Trading (Defendant) JUDGMENT OF : Windeyer J at 1

COUNSEL : Mr M J Steele (Plaintiff) Mr P Lakatos (Defendant) SOLICITORS : Rummerys (Plaintiff) D I Catt (Defendant) CATCHWORDS : STATUTES - INTERPRETATION - Pawnbrokers and Second-Hand Dealers Act - meaning of "auction" where not defined - does it include sale by tender - ordinary meaning does not - definition in other Acts does - purpose of other Acts not sufficiently similar to this Act to import definition Auction Sales Act 1958 (Vic) Auction Sales Act 1973 (WA) Auctioneers and Agents Act 1941 Auctioneers and Agents (Amendment) Act 1992 s3(1) Auctioneer and Agents Act 1971 (Qld) Auctioneers Act 1996 (Northern Territory) LEGISLATION CITED : Auctioneers Licensing Act 1898 s3 Auctioneers, Stock and Station and Real Estate and Business Agents Act 1941, Income Assessment Act 1936 Pawnbrokers Act 1902 Pawnbrokers and Second-hand Dealers Act 1996 s4(b), s4(1), s4(2)(b) s7, s21(1), Pawnbrokers and Second-hand Dealers Regulation 1997 Cl 19(1) Property Stock and Business Agents Act 1941 Second-hand Dealers and Collectors Act 1906 s2 Sch 2 Cl(d) Halsbury's Laws of England 4th Ed Vol 2 para 901 Harvela Limited v Royal Trust Co of Canada (CI) Ltd [1986] 1 AC 207 CASES CITED : ICIANZ Limited v Commissioner of Taxation (Cth) (1972) 46 ALJR 35 Lennon v Gibson & Hawes Limited [1919] AC 709 R v Taylor [1824] M'cle [362], 148 ER 151 Walker v Advocate-General [1813] 1 Dow 111, [1813] 3 ER 640 DECISION : See paragraph 22

IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION

WEDNESDAY 14 MARCH 2001 3790/00 TENDER CENTER PTY LTD V THE DIRECTOR GENERAL THE DEPARTMENT OF FAIR TRADING JUDGMENT Question 1 The question for decision is whether a business of conducting sales by tender - to the highest tenderer, provided that the tender is above any reserve price - is a business of an auctioneer within in the meaning of s4(b) of the Pawnbrokers and Second-hand Dealers Act 1996 (the Act). Facts 2 The plaintiff company, Tender Center Pty Ltd (Tender Center) operates a business at Lismore. It accepts goods on consignment as agent for vendors and offers those goods for sale as agent for the vendors. It is a big and apparently successful business. 3 Sales are conducted every two weeks. Prospective vendors bring their goods to the premises of Tender Center, usually over a period of six days. These are listed and available for inspection over a three day period at the end of each fortnight. An intending purchaser can lodge a bid for an item by filling in a form and leaving this at the Tender Center. On the Sunday at the end of a fortnight the bids are collated, the highest bidder ascertained, and provided that that highest bid is above the reserve price - if the vendor has fixed a reserve price - and if there is no reserve then in any event, that highest bidder becomes the purchaser. Both vendor and purchaser pay a fee to the Tender Center. 4 An officer of the Department of Fair Trading Has advised Tender Center that it is requires a licence under the Act to carry on its business. Tender Centre does not agree. The purpose of these proceedings is to resolve that question. Legislation 5 Pawnbrokers and Second-hand Dealers Act 1996

Section 7 7 Dealers in second-hand goods to be licensed

A person must not carry on a business of buying or selling second-hand goods except in accordance with a licence held by the person. Maximum penalty: 100 penalty units. Section 4 4 Restrictions on operation of this Act

(1) This Act does not apply so as to affect any activities conducted in accordance with a licence, permit or other authority under another Act (for example the Property, Stock and Business Agents Act 1941 , the Firearms Act 1989 , or the Motors Dealers Act 1974 ). In particular, this Act does not require a person to obtain a licence under this Act to carry on a business or any activity that is authorised by a licence, permit or other authority issued to that person under any other Act.

(2) This Act does not apply: (a) to dealing in second-hand goods in the course of a fundraising appeal authorised under the Charitable Fundraising Act 1991 , or (b) to the business of an auctioneer, or

(c) to the extent provided by the regulations, in relation to such persons and circumstances as the regulations may prescribe. The Act repealed the Pawnbrokers Act 1902 and the Second-hand Dealers and Collectors Act 1906 . 6 There was some correspondence between the parties suggesting that the Act did not apply to agents as opposed to principals, but that argument was not pursued. The only question for decision is whether the business of Tender Center is the business of an auctioneer. 7 One of the main purposes of the Act was to make the handling and disposition of stolen goods more difficult. Thus the Act imposes certain obligations on the proprietors of businesses within its ambit. These include the requirement to obtain documentary evidence of the identity of a vendor, the obligation to report any suspicion that goods could be stolen, and the obligation to keep all goods received for a period of fourteen days. This last requirement is imposed by s21(1) but clause 19(1) of the Pawnbrokers and Second-hand Dealers Regulation 1997 provides that s21(1) of the Act does not apply to goods consigned for sale by the licensee. That would it seems cover all, or nearly all, goods sold through Tender Center. Meaning of business of an auctioneer 8 Counsel for the plaintiff provided a number of dictionary and text definitions of "auction" which I set out:

a. Oxford English Dictionary : This notes the derivation of auction from the Latin to increase and gives the first meaning as "The action of increasing, growth". The second and more usual meaning attributed is Auction - a public sale in which each bidder offers an increase upon the price offered by the preceding, the article put up being sold to the highest bidder.

b. The Shorter Oxford English Dictionary: Auction - A (usually public) sale in which articles are sold to or reserved for the highest bidder.

To those can be added some definitions supplied by the defendant, namely,

a. Macquarie Dictionary : Auction - a public sale at which property or goods are sold to the highest bidder.

b. Websters International Dictionary : Auction - a public sale of property or goods to the highest bidder (as by successive increased bids).

c. Shorter Oxford Dictionary : Auction - a public sale in which each bidder offers more than the last previous bid, the article being put up being sold to the highest bidder.

Halsbury's Laws of England 4th Ed. Vol 2 paragraph 901 says that an auction is "a manner of selling or letting property by bids, usually to the highest bidder by public competition" with bids extracted by the auctioneer under the excitement of open competition. There is then a note which states "However, there exist auctions where the lot goes to the highest bidder, but the element of open competition is lacking in that bidders are unaware of rival bids. Postal auctions provide an example. These are conducted in a manner similar to that of selling by tenders." 9 I think it fair to say that the predominant idea of an auction as expressed in the foregoing references indicates a public sale where bidders have a chance to re-bid. 10 There is an interesting discussion of the difference between a sale by tender and a sale by auction in the judgment of Lord Templeman in Harvela Limited v Royal Trust Co of Canada (CI) Ltd [1986] 1 AC 207 at 230. There his Lordship said: Where a vendor undertakes to sell to the highest bidder, the vendor may conduct the sale by auction or by fixed bidding. In an auction sale each bidder may adjust his bid by reference to rival bids. In an auction sale the purchaser pays more than any other bidder is prepared to pay to secure the property. The purchaser does not necessarily pay as much as the purchaser was prepared to pay to secure the property. … In a fixed bidding sale, a bidder may not adjust his bid. Each bidder specifies a fixed amount which he hopes will be sufficient, but not more than sufficient, to exceed any other bid. The purchaser in a fixed bidding sales does not necessarily pay as much as the purchaser was prepared to pay to secure the property. But any bidder who specifies less than his best price knowingly takes a risk of being outbid. … Where there are two bidders with ample resources, each determined to secure the property and to prevent the other bidder from acquiring the property, the stronger will prevail in the fixed bidding sale and may pay more than in an auction which is decided not by the strength of the stronger but by the weakness of the weaker of the two bidders. On the other hand an open auction provides the stimulus of perceived bidding and compels each bidder, except the purchaser, to bid up to his maximum. Thus auction sales and fixed bidding sales are liable to affect vendors and purchasers in different ways and to produce different results.

I consider with respect that this passage expresses the generally held view of the difference between auction and tender. 11 There is, I consider, no doubt whatever that the method of sale was a sale by tender. The only question is whether the person conducting the tender business is conducting the business of an auctioneer so as to bring that person within the exception provided by s4(2)(b) of the Act. I would not have thought there was any doubt that the answer must be in the negative were it not for the strong argument advanced by counsel for Tender Center relying on definitions in legislation dealing with auctions. 12 Counsel pointed to definitions of "auction" or "auctioneer" or "sale by auction" which have appeared for many years in various statutes. The language of these appears to emanate from the statute 17 George III, c. 50 being: An act for granting to his Majesty certain Duties on Licences, to be taken out by all Persons acting as Auctioneers, and certain Rates and Duties on all Lands, Houses, Goods and other Things, sold by Auction; and upon Indentures, Leases, Bonds, Deeds and other Instruments.

Section 3 provided that: … no Person or Persons whatsoever, who now, or any Time or Times hereafter, doth or shall exercise the Calling or Occupation of an Auctioneer, Agent, Factor, or Seller by Commission, at any Sale of any Estates, Goods or Effects whatsoever, by Outcry, knocking down of Hammer, Candle, by Lot, Parcel, or any other Mode of Sale at Auction, or whereby the best or highest Bidder is deemed to be the Purchaser, or who shall act in any of the said Capacities, … without first taking out a Licence.

The Act was amended two years later by 19 George III Ch.56, but the description was unaltered in any material way. The real purpose of these Acts was to raise revenue. 13 In New South Wales the same words (with minor variations) were used in Acts regulating the Licensing of Auctioneers George IV No. 13 in 1829 and II Victoria No. 16 in 1847. I have not followed them through from beginning to end, but similar words appeared in the Auctioneers Licensing Act 1898. The Auctioneers, Stock and Station and Real Estate and Business Agents Act 1941, which repealed the Auctioneers Licensing Act 1898 included a more expanded definition. Under s3 the following definitions of "auctioneer" and "auction sale" were provided: "Auctioneer" means any person who exercises the trade or business of an auctioneer or seller by commission at any auction sale or who sells or attempts to sell or offer for sale or resale any estate, goods or effects by way of auction. "Auction Sale," "sale by auction," "sell by way of auction," and expressions of a similar character mean the selling of any estate, goods, or effects whatsoever by outcry, by what is known as Dutch auction, by knocking-down of hammer, candle, lot, parcel, instrument, machine, or by any other mode whereby the highest, the lowest, or any bidder is the purchaser; or whereby the first person who claims the property submitted for sale at a certain price named by the person acting as auctioneer is the purchaser; or whereby there is a competition for the purchase of any estate, goods, or effects whatsoever in any way commonly known and understood to be by way of auction, and shall be deemed to include the selling by outcry or in any other manner before mentioned in any public place or in any room, or mart, or place to which the public are admitted or have access, whether or not the sale has been advertised to take place. 14 That Act became, by renaming, the Auctioneers and Agents Act 1941. By the Auctioneers and Agents (Amendment) Act 1992 the definition of "auction sale," "sale by auction," "sell by way of auction," in s3(1) was amended by omitting the words "estate, goods, or effects" wherever occurring and inserting instead "land or livestock". Thereafter auctioneers of goods and effects did not require licences. But otherwise the definition is the same in the Act which has now been renamed again the Property Stock and Business Agents Act 1941. The Auctioneer and Agents Act 1971 (Qld), the Auctioneers Act 1996 (Northern Territory), the Auction Sales Act 1958 (Vic) and the Auction Sales Act 1973 (WA) all have definitions of auction or sale by auction which follow closely the New South Wales definitions. Each of them includes the words "or any other mode under which the highest or any bidder is the purchaser" and each includes the words "in any way commonly known and understood to be by way of auction". Counsel for the plaintiff emphasised the first of these quotations and counsel for the defendant the second. The purpose of all of this from the point of view of the plaintiff is to argue that there has been for over two hundred years an understanding incorporated into legislation of what is meant by sale by auction and that, although there is no definition in the Act under study, the same understanding ought to be imported into its construction. It is I think of some significance that in the original definition in 1777 the words were "or any other mode of sale at auction, or whereby the best or highest bidder is deemed to be the purchaser" whereas all the other Acts to which I have referred including the New South Wales Act do not include the words "at auction" making it more of a composite description. 15 Counsel for the plaintiff referred to two old cases in support of his contentions. The first of these is Walker v Advocate-General [1813] I Dow 111,[1813] 3 ER 640. In that case the public part of an auction had been concluded as no prospective purchaser had offered the reserve price of £50,000. The person conducting the auction said that he would be ready to "treat for the sale by private bargain". After that he left the auction site and there were then communicated to him certain offers, he having said that he would accept the highest provided it was better than £50,000. After a time he got a number of letters with offers, opened them and said that he would accept the highest and the bargain was made the next day. The person who conducted the auction was not a licensed auctioneer and the question was whether or not auction duty was payable. This required a decision on whether or not the actual sale which took place was a sale by auction. Lord Eldon held that it was because he considered that there was an engagement between the auction conductor and those interested to accept the highest offer and that for the purposes of the relevant Act namely 17 George III, c.50 and 19 George III, c.56, this was a sale by auction. At p 117 (Dow) p642 (ER) is the following paragraph: Lord Redesdale concurred in this opinion. The point appeared to him perfectly clear. The second Act was passed for the purpose of further regulation, and to prevent evasions; and after pointing out who were the persons who must take out licences, it proceeded to describe what should be considered as a sale by auction. It was to be a sale "by outcry, knocking down of hammer, candle, by lot, or parcel, or any other mode of sale at auction, or whereby the last, or highest bidder, is deemed to be the purchaser." The words "or whereby the best or highest bidder, is deemed to be the purchaser" he considered as explanatory of what was meant by the word "auction" and he conceived that all such sales were, for the purposes of this act, to be deemed sales at auction. 16 The other case referred to was R v Taylor [1824] M'cle [362], 148 ER 151. This was an appeal against a conviction of a person for acting as an auctioneer without licence. The facts in this case were a little strange. Persons who attended on a particular date were invited to put down two figures on a piece of paper. The terms were that the person whose paper had the highest figure would be declared the purchaser, but that if his lower figure exceeded all other figures put forward by other purchasers then he would be entitled to purchase at that lower figure. It was held by the Barons that this was sale within the terms of the definition. Garrow B said: It is true that this was not a sale by outcry, nor by the hammer, nor by candle; but it is in effect the same thing as a ordinary auction, where one persons bids a certain sum, another increases the offer, and so on, till no one will advance further, and the highest bidder becomes the purchaser. … The main distinction between a sale by private contract, and a sale by auction is, that the latter is a sale by increased biddings, which was case in this instance; and the legislature evidently intended that such should be the construction of their enactment, by saying, in addition to the modes described, "any other mode of sale at auction, or whereby the highest bidder is deemed to be the purchaser."

This decision is rather marginal and does not, I think, go a long way to support the plaintiff's claim. 17 I have come to the conclusion that the business conducted by the plaintiff would be the business of an auctioneer under the Property Stock and Business Agents Act 1941 because it would be a sale of goods by a mode whereby the highest bidder is the purchaser. The question then is whether one should conclude that in the Act, where it refers to the business of an auctioneer without any definition of that term, it was intended those words to have the same meaning as they had in legislation relating to auction sales for a period of over two hundred years but bearing in mind that the 1777 and 1779 Acts were for revenue raising rather than for control of auctioneers or protection of persons dealing with auctioneers and paying money to them. 18 As the position is not altogether clear it is possible to refer to extraneous information. In the second reading speech in the Legislative Council, Hansard 29 May 1996 p1678/9, the Honourable Elizabeth Kirkby questioned the exclusion of auction sales from the ambit of the Act and stated that she hoped that the Minister in reply would explain why auctioneers had been excluded from the Bill. The Honourable R G Dyer, who had charge of the Bill in the Council, responded to this as follows at Hansard p1681: The Hon. Elisabeth Kirkby referred to auctioneers. Strictly speaking, her remarks are not relevant to the bill. I remind the House and the honourable member that auctioneers were deregulated some years ago. So the comments were not really germane to the bill in that sense, given that auctioneers have been deregulated. Whether they ought to have been deregulated is another matter, but that is the state of the law.

This comment as to deregulation could only have related to the 1992 amendment which removed the licensing requirements in respect of auctioneers of goods and effects and limited the requirements to auctioneers of land and stock. It might then be thought to follow that if sale by auction of goods or effects was removed from the ambit of the Property Stock and Business Agents Act 1941 in 1992 and if sale by auction of goods or effects before 1992, or for that matter, of land and stock under that Act thereafter, included sales by tender, then the intention was that such sales should also be excluded from the operation of the Act. It is necessary to bear in mind that the Act repealed the Second-hand Dealers and Collectors Act 1906 . By the combined effect of s2 and Clause(d) of the Second Schedule of that Act it did not apply to "second hand goods acquired by a licensed auctioneer to be sold on commission in accordance with the provisions of the Auctioneers Stock and Station and Real Estate Agents Act 1941 as amended by subsequent Acts. As sales of goods by auction are no longer covered by the Auctioneers and Agents Act it is possible that after 1992 a licence was required to sell them under the Second-hand Dealers and Collectors Act 1906 . No argument was addressed on this and perhaps it was not realised, which explains why the Property Stock and Business Agents Act 1941 is given by way of example in s4(1) of the Act, but if that is the explanation then s4(2)(b) would have had no purpose. It is really idle to speculate except to show that one cannot be certain what was intended and to conclude that the debate in parliament does not assist in interpretation. 19 One must be careful in transferring the definition of a term in one Act into the meaning of an undefined term in another Act, particularly if they do not deal with precisely the same matters. It is easier to make the connection where one Act repeals another Act but deals with much the same matters. That was the case in Lennon v Gibson & Howes Limited [1919] AC 709. In that case the Privy Council was dealing with the meaning of the phrase "sugar cane received at a mill". In an earlier Act dealing with the same subject matter that term "sugar cane received" was defined to mean "sugar cane delivered at a sugar works and accepted". In the subsequent Act there was no such definition. The judgment of the Privy Council was delivered by Lord Shaw of Dunfermline. At page 711 he said in discussing this matter: In the absence of any context indicating a contrary intention, it may be presumed that the legislature intended to attach the same meaning to the same words when used in a subsequent statute in a similar connection.

This subject was considered by Walsh J in ICIANZ Limited v Commissioner of Taxation (Cth) (1972) 46 ALJR 35. In that case at pages 40 and 41 His Honour discussed certain definitions of "mine" and "mining" as used in State legislation and considered their relevance in the construction of the Income Tax Assessment Act 1936 so far as it allowed deductions for expenditure in carrying on mining operations upon a mining property. After considering definitions in various State Acts His Honour said at page 41: The circumstances that according to State legislation an operation is a mining operation is not conclusive that it is much an operation within the meaning of s122 of the Act. In Australian Slate Quarries Ltd v Federal Commissioner of Taxation (1923), 33 C.L.R. 416, at p. 423, Higgins J. said that it was dangerous to rely much on the language used in Acts of the States. But it has been regarded as a factor that can be taken into account: see the same case, at p. 420 of the report; Federal Commissioner of Taxation v Henderson (1943), 68 C.L.R. 29, at p. 44 and North Australian Cement Ltd v Commissioner of Taxation (Cth) (1969), 119 C.L.R. 353, at p. 359. I am of opinion that where a question arises whether or not a given type of operation falls within the ordinary meaning of the words used in the Act, according to the "common understanding" of the sense in which they are current used (see N.S.W. Associated Blue-Metal quarries Ltd v Federal Commissioner of Taxation (1956), 94 C.L.R. 509, at pp. 512, 514) it cannot be irrelevant that the Parliaments of the States have treated that type of operation as being within those words. It is true, of course, that a Parliament may use an expression in a defined sense that does not correspond with its ordinary meaning. But when in many different enactments an operation is treated as being a mining operation, this must itself have an influence upon the "common understanding" of that term, at any rate upon the understanding of it by those whose business it is to be acquainted with legislative provisions applicable to the operation in question. 20 The main purpose of the acts passed in the reign of George III was to obtain revenue by way of percentage on sales. The main purpose of the Act is to restrict the trade in stolen goods and to control pawnbrokers. The main purpose of the Property Stock and Business Agents Act 1941 (and for the most part its interstate counterparts) is to ensure that persons engaged in the activities dealt with by that Act are licensed and are fit and proper persons in character and competence to hold a licence; and to protect moneys paid to such persons. I do not think the purposes are sufficiently similar as to justify bringing to the Act a defined meaning in another Act which I consider does not correspond with the ordinary meaning. 21 It follows that the plaintiff requires a licence for its business, so that the summons should be dismissed. It was agreed by the parties there should be no order as to costs. I do point out that as the fourteen day holding period does not apply and as the vendors would have contact with the Tender Center after sale to obtain payment, the activities of the Tender Center do not give any great opportunity to dispose of stolen goods without risk. That was pointed out by the plaintiff in argument but cannot determine the question. 22 Orders

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