Concrete Constructions v Nelson
41 It was common ground that the principles governing construction of the expression 'in trade or commerce' in s 52 of the TP Act are those laid down by the joint judgment in Concrete Constructions. These principles have been restated and followed by this Court on many occasions. The difficulty is not so much in stating the principles but in applying them to the circumstances of particular cases.
42 In Concrete Constructions, a construction worker alleged that while employed by a construction company his foreman had instructed him to remove certain grates from entry points to air conditioning shafts. The foreman was alleged to have said, incorrectly, that each grate was secured by bolts. The worker sustained injuries when attempting to remove a grate. He claimed damages from his employer on the ground that the foreman's incorrect statement constituted misleading or deceptive conduct in trade or commerce, in contravention of s 52 of the TP Act.
43 All members of the High Court held that the facts pleaded in the statement of claim did not give rise to a cause of action under s 52 of the TP Act because the employer's conduct was not in trade or commerce. Brennan CJ, Toohey and McHugh JJ, in separate judgments, expressed the view that s 52 is concerned with protecting persons in their capacity as consumers. Since the foreman's conduct did not affect the construction worker in his capacity as a consumer of goods and services, his action had to fail. The joint judgment (Mason CJ, Deane, Dawson and Gaudron JJ), by contrast, held (at 601-602) that s 52 of the TP Act, on its proper interpretation, prohibits a corporation from engaging in misleading or deceptive conduct 'in trade or commerce', regardless of whether the conduct misleads or deceives a person in the capacity of consumer.
44 The joint judgment addressed the meaning of the expression 'in trade or commerce' in s 52. The following propositions emerge from the judgment (cf the judgment of Dowsett J, dissenting, in Hearn v O'Rourke (2003) 129 FCR 64, at 72-73 [28]):
(i) The phrase 'in trade or commerce' in s 52 has a restrictive operation (at 602).
(ii) Two competing constructions of the phrase are available. The broader view would encompass (at 602-603):
'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.'
This would extend, for example, to a case where one employee gives inaccurate information to another in the course of carrying on the building activities of a commercial builder. The narrower view is that the phrase 'in trade or commerce' refers only (at 603):
'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…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.'
The narrower view is the correct construction of s 52.
(iii) Accordingly, what s 52 is concerned with is (at 604):
'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 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.'
(iv) In some areas the dividing line between what is and what is not conduct in trade or commerce may be less clear and (at 604):
'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, trad 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 the purposes of, some trading or commercial dealing between the corporation and the particular employee.'
45 Since the alleged misleading or deceptive conduct in Concrete Constructions itself consisted of an internal communication between employees in the course of their ordinary activities in constructing a building, the conduct was not in trade or commerce (at 605). Thus the employer had not contravened s 52 of the TP Act.
46 In applying the principles laid down by the High Court it is helpful to bear in mind the context in which Concrete Constructions was decided. As Wilcox J observed in Barto v GPR Management Services Pty Ltd (1991) 33 FCR 389, at 393:
'It is easy to understand the policy reasons underlying Concrete Constructions. A contrary result would have led to s 52 being used as a vehicle for the recovery of personal injury damages in a large number of industrial and motor accident cases; even cases where the respondent was not negligent, but only if it happened to be a "corporation" as defined in s 4 of the Trade Practices Act. And this development would have occurred at the very time that some States were legislating to exclude personal injury damages claims in industrial and/or motor accident cases.'
47 The context assists in understanding the import of remarks in the joint judgment, which sometimes appear to be treated as though they are contained in a statute rather than a judgment construing a statute. For example, their Honours observed (at 604) that s 52 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'.
Clearly enough, this observation was directed at the construction worker's attempt to use s 52 of the TP Act to circumvent restrictions imposed by State law on the recovery of damages in personal injury cases. It should not be regarded as an independent principle of construction intended to narrow the scope of s 52 beyond what follows from the construction adopted by the joint judgment.
48 The joint judgment in Concrete Constructions acknowledged that the 'dividing line' between conduct that is or is not in trade or commerce, according to the narrower construction of s 52 of the TP Act, may be difficult to draw. However, once the narrower construction of s 52 was adopted, the facts of Concrete Construction clearly fell outside s 52. Other fact situations will be much closer to the line.
49 The difficulty that can arise in applying the principles in Concrete Constructions is illustrated by the different views expressed in this Court as to whether representations made by a corporation to an employee in connection with the employee's terms of employment constitute conduct in trade or commerce. In Barto v GPR Management, in the context of a strike out application, Wilcox J held (at 395) negotiations with a prospective or present employee in respect of that person's employment contact is conduct capable of falling within s 52 of the TP Act. In Martin v Tasmania Development and Resources (1999) 163 ALR 79, at 96-98 [70]-[77], Heerey J disagreed, holding that a communication to an employee asserting that termination of his employment was required on operational grounds was not a dealing of a trading or commercial nature. (This issue was not addressed on appeal: Tasmania Development and Resources v Martin [2000] FCA 414.) In Stoelwinder v Southern Health Care Network (2000) 177 ALR 501, Finkelstein J preferred Barto to Martin. In Hearn v O'Rourke (2002) 193 ALR 264, a case involving a different fact situation, Kiefel J at first instance expressed a preference for the reasoning in Martin. The Full Court allowed an appeal (Finn and Jacobson JJ; Dowsett J dissenting), but did not find it necessary to resolve the conflict: Hearn v O'Rourke (2003) 129 FCR 64.