Consideration
24 The construction of s 12DL must be approached having regard to its dual operation as a section that imposes both criminal and civil liability for a contravention of either s 12DL(1) or (4). The heading to the subdivision in the Act of which s 12DL forms part is headed "Consumer protection". That heading provides part of the context in which the substantive provisions of Subdiv D of Div 2 of Pt 2 of the Act must be construed: s 13 of the Acts Interpretation Act 1901 (Cth). The heading should be taken into consideration in determining the meaning of those sections in cases of ambiguity. However, as Mason CJ, Deane, Dawson and Gaudron JJ cautioned in Concrete Constructions (NSW) Pty Ltd v Nelson (1990) 169 CLR 594 at 601, the heading does not control the permissible scope of the substantive provisions within the subdivision in the Act. The heading cannot properly be used to impose an unnaturally constricted or expanded meaning upon the words of those substantive provisions: cf Concrete Constructions 169 CLR at 601-602, 603-604.
25 Another important contextual feature that must be considered in construing s 12DL is its imposition of strict criminal liability for a contravention of each of s 12DL(1) or (4). This feature cautions against (but does not always exclude) the adoption of an expansive construction of narrower, but clear words. However, as Gleeson CJ, Gummow, Hayne and Heydon JJ said in Stevens v Kabushiki Kaisha Sony Computer Entertainment (2005) 224 CLR 193 at 210-211 [45]:
"... in choosing between a relatively broad and a relatively narrow construction of legislation, it is desirable to take intoaccount its penal character. The present litigation does not arise from the institution of criminal proceedings under the offence provisions now contained particularly in s 132 of the Act. However, a person who makes or sells a circumvention device (s 132(5B)) is liable to imprisonment for not more than five years (s 132(6A)). An appreciation of the heavy hand that may be brought down by the criminal law suggests the need for caution in accepting any loose, albeit "practical", construction of Div 2A itself." (emphasis added)
26 The initial prohibition in s 12DL(1) applies to an issuer of a card (by dint of s 12DL(3)) sending one or other of the two cards defined in s 12DL(5), unless the person sends the card in accordance with s 12DL(2). When the chapeau to s 12DL(2) refers to "the card", it identifies the particular card sent to which s 12DL(1) applies. That is, "the card" in the chapeau to s 12DL(2) is either one or other of a credit card or a debit card as defined in s 12DL(5). A significant feature of s 12DL(2)(b)(ii) is that the card sent may be in renewal, or replacement of, or in substitution for, "a card of the same kind" that has two other characteristics; first, that "a card of the same kind" had been sent previously to the person concerned and, secondly, it (the last mentioned card) had been used for "a purpose for which it was intended to be used".
27 The three purposes specified at the commencement of para (b) in s 12DL(2) must each be given a distinct meaning and operation. This is because the Court must strive to give meaning to every word of the provision and construe it, if possible, so as to give effect to harmonious goals: Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 at 381-382 [69]-[71] per McHugh, Gummow, Kirby and Hayne JJ.
28 A renewal of a card ordinarily will occur close to the expiry date of the credit or debit card. By renewing the card, the issuer creates a new expiry date for the card. A replacement card ordinarily would be one sent to take the place of a card that had been lost by or stolen from the cardholder. A card in substitution for an existing card is different, again, from a renewed or replacement card. A substitute is not normally an exact replica. Often a substitute will have different characteristics, even though it will be able to take the place of the original. The Oxford English Dictionary defines "substitution" as including "the putting of one … thing in place of another" and "replacement (of one thing) by another".
29 Suppose that on renewal, a renewed debit card has a significant new security feature offering the cardholder extra protection that the expired debit card did not have. Or suppose that because of improvements in technology a completely new payment system allowed the renewed card to be used in many more locations, but with the same security features as the expiring card. If the Commission's contentions were correct, the presence of the new security feature or the functionality with the new payment system would mean that the card was not "of the same kind" as the expiring card. I reject that argument.
30 The expression "of the same kind" does not require that the previous and later cards are absolutely identical. A retail business will replace or substitute new goods for those it has sold. Sometimes suppliers of such goods discontinue production of a particular good or go out of business. The trader will often seek a replacement or substitute good that has some identity or characteristic in common with the unavailable product. The new good may be an improved version of the old with more functions or features, perhaps having shed others: cf the discussion in the dissenting judgments of Stephen J and Aickin J in Federal Commissioner of Taxation v St Hubert's Island Pty Ltd (In Liq) (1978) 138 CLR 210 at 218 and 242-243.
31 The context and the characteristics or properties of the original and the substitute can assist in ascertaining whether what is put forward is truly a substitution for what was originally there. Usually, it will be a question of fact whether a substitution or something more radical has occurred in a given case. In competition law, s 4E of the Trade Practices Act 1974 (Cth) provides a definition of a market as including a market for the particular goods or services under consideration "and other goods or services that are substitutable for …" the former. Yet, the mere fact that a consumer will on occasion purchase tea instead of coffee does not necessarily mean that because of that substitution tea and coffee cannot be distinct goods with their own separate markets. On the other hand, it maybe that, if the relevant market is the hot beverage market, they will be substitutes; hence the importance of the context in which substitution is assessed: cp Arnotts Ltd v Trade Practices Commission (1990) 24 FCR 313 at 332 per Lockhart, Wilcox and Gummow JJ; Queensland Wire Industries Pty Ltd v Broken Hill Proprietary Co Ltd (1989) 167 CLR 177 at 188 per Mason CJ and Wilson J.
32 The three purposes for which a new card may be sent under s 12DL(2)(b) are qualified by the requirements in subparagraphs (i) and (ii) that it be "a card of the same kind previously sent to the targeted person", with one of the two further qualifications given in each provision. Those two further qualifications operate in two different scenarios. In s 12DL(2)(b)(i) the person liable to the issuer of the previous card (e.g. Westpac's customer) must have made a request in writing to the issuer to send the person that (previous) card. The recipient of the previous card could be both the customer or a cardholder nominated by the customer (such as a spouse, partner or child). This qualification requires that the customer and other recipient have a pre-existing relationship established by an earlier request in writing from the customer for the previous card.
33 These relationships may have existed for many years, and may have originated before s 12DL and its statutory predecessors applied to it so it may be that no such written request exists. One evident purpose of s 12DL(2)(b)(ii) is to cater for an existing consensual relationship. It provides that the previous card actually must have been used for a purpose for which it was intended to be used. So, if a cardholder nominated by a customer has used the previous card appropriately, that use will create a sufficient relationship with the issuer to justify the sending of the later card. Importantly, the use made of the previous card does not have to exhaust or cover the range of functions or features of the card; one use or one method of use for the permitted purpose is all that s 12DL(2)(b)(ii) requires.
34 The concept of use of a card also relates to the definitions of credit and debit cards in s 12DL(5). Those definitions are very broad and, partly, draw upon the ordinary English meaning of a credit card and a debit card. A credit card is used to borrow from or create a debt to the issuer for which the customer is liable. When a use of a credit card creates a liability of the customer, he or she will also become liable to the issuer for interest on the funds that the customer has obtained on credit. In contrast, a debit card is used to obtain access to the customer's own money held or owed by the issuer.
35 The definitions of each type of card also include a card "that may be used as [a card] referred to" in the prior parts of the definition. This is a significant indication in s 12DL that individual uses within the range of uses to which a particular card may be put are different from the "kind" of card that is referred to in s 12DL(2)(b)(i) and (ii).
36 However, as s 12DL(4) recognises, it is possible to use a credit card as a debit card and vice versa. That subsection prohibits any person, (not just the issuer of the card affected by the operation of s 12DL(1), (2) and (3)), from transforming the capacity of the particular card to be used into, or so as to include use as, a card of the other kind unless the cardholder (not just the customer or person liable) makes a request to the person in writing. This protective function, prevents a significant addition of a very different use that would change the defining characteristic of the operation of the card without the cardholder making a written request for that change. Of course, if such a change has been authorised, a card that can be used dually as a credit and debit card, will be able to be renewed, replaced or substituted by sending the cardholder "a card of the same kind" as referred to in s 12DL(2)(b).
37 The Commission also relied in support of its narrow construction of "a card of the same kind" on earlier and significantly different versions of s 12DL in which that expression appeared in a subsection similar to the present s 12DL(2). The earlier versions created an offence in s 12DL(1) only in respect of debit cards and "an article that may be used as a debit card of that kind". The emphasised words have no counterpart in the present s 12DL. I reject this argument.
38 First, the predecessor versions of s 12DL had significantly different wording and operated differently. Secondly, because s 12DL in its present form is different to the previous versions, the relevant task of statutory construction is to construe the section as it now is. The previous wordings were in respect of differently expressed provisions, including the repealed offence created in the former version of s 12DL(1): cf McNamara v Consumer Trader and Tenancy Tribunal (2005) 221 CLR 646 at 661 [40] per McHugh, Gummow and Heydon JJ, Gleeson CJ agreeing at 650 [1]. Thirdly, I am of opinion that the language of the present s 12DL is clear and the earlier versions do not elucidate its meaning. Fourthly, the earlier version of s 12DL(1) expressly referred to two separate types of debit card including one being "a debit card of the same kind" which may have had a relationship to the expression "card of the same kind" as then used in s 12DL(2). In addition, there was also a definition of "debit card". The absence in the present s 12DL of the expression "a debit card of that kind" demonstrates the irrelevance of the earlier legislation to the construction of the Act in its present form.
39 The Commission also relied on complaint logs to argue that the new card was not regarded by Westpac's customers as a card of the same kind as their Handycard. A total of 740 complaints was recorded although it is not clear whether one complainant could have had more than one complaint recorded. In any event, the total number of complaints is inconsequential having regard to the fact that over 420,000 new cards were issued, the last over six months ago.
40 Next the Commission relied on what it asserted were differences in reported fraudulent use of all Westpac debit cards in relation to the category "card not present" in the 12 quarters to September 2009. The Commission did not put forward any analysis to make good its assertion that this material was probative of the new card not being a card of the same kind as the Handycard. As a percentage of the total amount spent on the cards, the incidence of this fraudulent use varied quarter by quarter within a range, while the overall spending has been significantly increasing. The first three quarters in 2008 and 2009 show broadly similar percentages although they are all slightly less for 2009. In contrast the incidence of fraudulent use of a PIN is very much smaller.
41 More importantly, in the "card not present" figures, the highest recorded total of fraudulent transactions was about $250,000 in the March 2009 quarter in respect of over $250 million worth of "card not present" transactions. In the succeeding two quarters the total corresponding figures for fraudulent transactions declined to about $180,000 of a total spend of over $410 million in the third quarter.
42 I am unable to understand how these figures demonstrate that the new cards are not cards of the same kind as the Handycards the customers formerly held. The incidence of fraudulent use when a card was not present appears to be trivial in relation to the overall use of debit cards in this type of transaction.