CATCHWORDS Trade Practices Act - case stated - misleading and deceptive conduct ~ publication of newspaper articles concerning pleasure cruise ~- whether publication of articles within trade and commerce - associated jurisdiction - action for defamation Trade Practices Act 1974 ss. 6, 52(1), 75B, 82 Federal Court Rules Order 29 r.2 AUSTRALIAN OCEAN LINE PTY. LTD. v. WEST AUSTRALIAN NEWSPAPERS LIMITED and WILLIAM ROSS HARVEY No. WA Gl of 1983 Toohey J. Perth 19 April 1983 IN THE FEDERAL COURT ) OF AUSTRALIA ) WESTERN AUSTRALIA ) No. WA Gl of 1983 DISTRICT REGISTRY ) GENERAL DIVISION ) BETWEEN: AUSTRALIAN OCEAN LINE PTY. LTD. Applicant and WEST AUSTRALIAN NEWSPAPERS LIMITED First Respondent and WILLIAM ROSS HARVEY Second Respondent ORDER JUDGE MAKING ORDER Toohey J. DATE OF ORDER 19 April 1983 WHERE MADE : Perth THE COURT ORDERS: 1. The questions of Law reserved for the consideration of the court be answered as follows : (i) Does the statement of claim disclose any cause of action or triable issue under s.52 of the Trade Practices Act against the first respondent? Answer: Yes (ii) (ii1) (1v) (v) Was the conduct of the first respondent complained of in the statement of claim engaged in by the first respondent in trade or commerce within the meaning of s.52 of the Trade Practices Act? Answer: Yes Was the conduct of the first respondent complained of in the statement of claim capable in law of being misleading or deceptive or likely to mislead or deceive within the meaning of s.52 of the Trade Practices Act? Answer: Yes Does the statement of claim disclose any cause of action or triable issue under the Trade Practices Act against the second respondent? Answer: Yes If the statement of claim does not disclose any cause of action or triable issue under s.52 of the Trade Practices Act or otherwise under that Act against the first and second respondent or either of them, does this Court have jurisdiction to hear and determine the claims of the applicant (vi) The respondents' notice of motion dated 19 January 1983 against the respondents under the defamation laws of Western Australia? Answer: No If the statement of claim does disclose a cause of action or triable issue under s.52 of the Trade Practices Act or otherwise under that Act against the first and second respondents, or either of them, does this court have jurisdiction to hear and determine the claims of the applicant against the respondents under the defamation laws of Western Australia? Answer: Yes be dismissed, The respondents pay the applicant's costs of the case stated and of the motion, to be costs in the cause. IN THE FEDERAL COURT ) OF AUSTRALIA ) WESTERN AUSTRALIA ) No. WA Gl of 1983 DISTRICT REGISTRY ) GENERAL DIVISION ) BETWEEN: AUSTRALIAN OCEAN LINE PTY. LTD. Applicant and WEST AUSTRALIAN NEWSPAPERS LIMITED First Respondent and WILLIAM ROSS HARVEY Second Respondent CORAM : TOOHEY J. 19 April 1983 REASONS FOR JUDGMENT On 8 January 1982 the ship Dalmacija returned to Fremantle at the end of a 25 day Christmas holiday cruise. In the Daily News of Friday 8 January and Monday 11 January and in the West Australian of 9 January and 12 January there appeared articles about the cruise in large part, though not entirely, critical of it. In the main the articles reported the comments of passengers, sometimes in direct and other times in indirect speech. As well there was a small amount of comment by the authors of the articles. The applicant, Australian Ocean Line Pty. Ltd., 1s a company incorporated in Western Australia. It had the Dalmacija under charter at the time of the cruise. The first respondent, West Australian Newspapers Limited, 1s a company incorporated in Western Australia and it is the publisher and proprietor of the Daily News and the West Australian, daily newspapers having afternoon and morning circulation respectively throughout Western Australia. The second respondent, William Ross Harvey, is the printer of each of those newspapers. The applicant has brought proceedings in the Federal Court, claiming that the publication and printing of the articles, more accurately, of those portions complained of in the statement of claim, constituted conduct that was misleading and deceptive or alternatively was likely to mislead or deceive, contrary to s.52 of the Trade Practices Act 1974. The pleading was also in terms that amounted to an allegation that the respondents had defamed the applicant in the course of its business. The respondents have conditionally appeared to the application and statement of claim. The reason for a conditional appearance is not stated in the document itself. At the same time they lodged a notice of motion seeking a dismissal of the proceedings. Again, the basis for this application does not appear in the document itself. But the respondents' position, both as to the appearance and the motion, have I think been sufficiently made clear in the steps that have been taken since those documents were filed. At the suggestion of the respondents and with the consent of the applicant a case was stated for the decision of this court, seeking the determination of several questions relating to the jurisdiction of the Federal Court to entertain the causes of action pleaded against the respondents an the context in which they were pleaded. Although the case stated is by way of amplification of the motion seeking a dismissal of the proceedings, it is in truth a case stated and the matter should be approached accordingly. By that I mean that Order 29 r.2 of the Federal Court Rules empowers the court to make orders for "the statement of a case and the question for decision". That having been done, it is incumbent upon the court, assuming the question to be relevant, to answer it. It would not be appropriate to approach the matter in precisely the same way as if it were an application to strike out a statement of claim as disclosing no reasonable cause of action. In that case the question is whether it would be open to the applicant upon the pleadings to prove facts at the trial which would constitute a cause of action. Mutual Life & Citizens Insurance Co. Ltd. v. Evatt (1970) 122 CLR 628 at p.631. On such an application it may well be appropriate for the court to say little more than that 1t is not satisfied that the applicant cannot succeed, without necessarily expressing a concluded view on the questions debated before it. The case stated comprises a number of facts which the court is asked to assume to be true for the purpose of answering the questions of law reserved for its consideration. Annexed to the case stated are the newspaper articles in question and the statement of claim. No defence has yet been f1rled by the respondents. I propose to set out each question of law for the determination of the court, consider the submissions of counsel and answer the question. 1. Does the statement of claim disclose any cause of action or triable issue under s.52 of the Trade Practices Act against the first respondent? The point of this question lies in the respondents' submission that even if the contents of the newspaper articles complained of can be described as misleading or deceptive, on no view of the facts pleaded in the statement of claim can it be said that in any relevant respect the first respondent engaged in conduct in trade or commerce. The respondents do not deny that in publishing and selling the newspapers in which the articles appeared the first respondent engaged in trade. But, they say, the trade was that of publishing and selling newspapers. The respondents accept that it 1s possible to engage in misleading or deceptive conduct in that trade, for instance by publishing circulation figures that are false or by claiming a greater number of pages of classified advertisements than is the case. However, the argument runs, if the complaint 1s of a report, the contents of which are said to be inaccurate, the conduct complained of is not conduct in the trade of publishing and selling newspapers. Counsel for the respondents, in developing that submission, was drawn into matters that more appropriately arise under the second question asked in the case stated. It is convenient to deal with those matters now. Counsel argued that s.52 of the Trade Practices Act finds its place in Part V - Consumer Protection. Even though an applicant relying upon s.52 need not himself be a consumer, he must point to a consumer who has been or who is likely to be mislead or deceived by the conduct in question. In the case of the publication of a newspaper it is the reader who is the consumer. Those who buy newspapers are, in any relevant sense, consumers of newspapers not of sea cruises. Counsel drew attention to the remarks of Mason J. in The Queen v. Credit Tribunals; ex parte General Motors Acceptance Corporation (1976-77) 137 CLR 545 at p.561 : "Here the setting 1n which s.52(1) appears is shown by the headings 'Part V - Consumer Protection' and 'Division 1 - Unfair Practices'. In this context the prohibition contained in the sub-section emerges as an important general prohibition against a corporation in the course of trade or commerce engaged in a form of conduct, a trade practice, which is unfair". Counsel sought to draw from this dictum the proposition that in s.52 the conduct complained of must be an unfair trade practice, something incidental to the trade which in the present case is that of publishing and selling newspapers. And, he said, there is no unfair practice in the trade of publishing and selling newspapers just because a report of general interest may prove to be false. In my view the respondents' submissions place too narrow a construction on the language of s.52(1). The first respondent published the articles in the course of carrying on an activity which was undoubtedly commercial and which may be fairly described as conduct in trade or commerce. While it may be true to say that the first respondent's activity 1s the publishing and selling of newspapers, 1t would be unreal to divorce the paper which is sold from its contents. The sale of a newspaper 1s a sale of goods to a consumer. And the buyer is a consumer not only of the object he buys but, actually or potentially, of products or services it describes. If the product or service is described in terms that are false, the buyer 1s thereby mislead or deceived or is likely to be mislead or deceived by what he has read. And what he has read is part of the conduct of the publisher in publishing and selling the newspaper in question. Whether the applicant makes good its allegations, whether in terms of s.86 of the Act it can show that it is a person who has suffered loss or damage by conduct of the first respondent done in contravention of s.52, of course remains to be seen. But I am satisfied that the statement of claim discloses a cause of action against the first respondent under s.52 of the Trade Practices Act. I answer this question - yes. 2. Was the conduct of the first respondent complained of in the statement of claim engaged in by the first respondent in trade or commerce within the meaning of s.52 of the Trade Practices Act? The respondents approached this question on the basis that it was only another way of looking at question 1. [In that event, for the reasons already given, I answer this question - yes. 3. Was the conduct of the first respondent complained of in the statement of claim capable in law of being misleading or deceptive or likely to mislead or deceive within the meaning of s.52 of the Trade Practices Act? The respondents' submission that this question should be answered no was put in this way. Conduct is capable in law of being misleading or deceptive or likely to mislead or deceive if 1t 1s capable of leading people into error. Taking the newspaper articles as a whole, no reasonable person would be mislead because the articles would do no more than cause a reader to be confused or wonder at the service provided on the Dalmacija. Counsel for the respondents relied upon Parkdale Custom Built Furniture Pty. Ltd. v. Puxu Pty. Ltd. (1982) 42 ALR 1, in particular the rejection by the High Court of the notion that mere confusion regarding products being offered for sale may amount to being deceived or mislead. But the answer to the respondents' argument is that para. 13 of the statement of claim pleads that shortly after the publication of the articles,and in consequence of them, persons who had made reservations for later cruises of the ship cancelled their bookings; that travel agents removed tour brochures from their racks;and that tour promoters and travel agents became generally reluctant to promote the tour for fear of being tainted with the adverse publicity generated by the respondents' conduct. Again, it may be that the applicant will not make good those allegations at the hearing; that remains to be seen. But the allegations having been made and having been accepted for the purpose of the case stated, I am quite unable to say that the conduct of the first respondent was not capable in law of being misleading or deceptive. Indeed if it be accepted for the purposes of the present exercise that persons were mislead, it is but a short though not inevitable step to conclude that the articles were "misleading or deceptive or likely to 9. mislead or deceive", words described by Gibbs C.J. in Parkdale at p.6 as "on any view tautologous". I must answer this question - yes. 4. Does the statement of claim disclose any cause of action or triable issue under the Trade Practices Act against the second respondent? Counsel for the respondents submitted that s.52(1) of the Trade Practices Act is concerned with the conduct of a corporation and that nothing in the statement of claim pleads facts capable of supporting a cause of action against the second respondent under that Act. Counsel drew attention to s.6(3) of the Act whereby Division 1 of Part V, in which s.52 appears, is given the effect it would have if a reference in that division to a corporation included a reference to a person not being a corporation (s.6(3)(c)). Counsel for the applicant stated that he did not rely upon s.6 but upon s.75B of the Act. That section provides that a reference in Part VI - Enforcement and Remedi2zs to a person involved in a contravention of a provision of Part IV or V shall be read as a reference to a person who : "(a) has aided, abetted, counselled or procured the contravention; (b) has induced, whether by threats or promises or otherwise, the contravention; (c) has been in any way, directly or indirectly, knowingly concerned in, or party to, the contravention; or 10. {d) has conspired with others to effect the contravention". The significance of s.75B is that s.82 provides that a person who suffers loss or damage by conduct of another that was done in contravention of a provision of Part IV or V may recover the loss or damage by action against that other person "or against any person involved in the contravention". In other words, while s.52 is aimed only at the conduct of a corporation, s.82 makes liable to compensate an injured party a person who has been involved in a contravention in the sense spoken of by s.75B. The respondents did not contend that in this respect s.82 exceeded the constitutional authority of the Federal Parliament or that the section was in any other respect invalid. In my view the statement of claim does disclose a cause of action or triable issue under the Trade Practices Act against the second respondent. I answer this question - yes. 5. If the statement of claim does not disclose any cause of action or triable issue under s.52 of the Trade Practices Act or otherwise under that Act against the first and second respondent or either of them, does this Court have jurisdiction to hear and determine the claims of the applicant against the respondents under the defamation laws of Western Australia? The answer to this question is self evidently no and the respondents did not contend otherwise. The Federal Court has no jurisdiction to entertain a claim under the 11. defamation laws of Western Australia unless that claim is brought as part of the associated jurisdiction of the court. 6. If the statement of claim does disclose a cause of action or triable issue under s.52 of the Trade Practices Act or otherwise under that Act against the first and second respondents, or either of them, does this court have jurisdiction to hear and determine the claims of the applicant against the respondents under the defamation laws of Western Australia? In arguing that this question should be answered in the negative, counsel for the respondents drew attention to the fact that the range of defences in a defamation action may be considerably wider than in an action brought under s.52 of the Trade Practices Act. That may well be the case; I express no opinion on the matter. But it was not suggested by the applicant that if this court has jurisdiction to entertain the defamation claim, defences available to the respondents at common law or by statute would not be available to them before this court. In my opinion they undoubtedly are available. If it be the case that there are fewer defences available to the respondents in answer to a claim under s.52 than in answer to a claim in defamation, the answer must in colloquial terms be "so what". They are different causes of action. What has to be established in each case is different and 12. the defences available are different. The answer to this question must be approached with reference to the judgment of the High Court in Philip Morris Inc. v. Adam P. Brown Male Fashions Pty. Ltd. (1980-81) 33 ALR 465, a decision which I discussed in Muller v. Fencott (1982) ATPR 40-266. See too the recent analysis by Fitzgerald J. in L.E. Stack v. Coast Securities No. 9 Pty. Ltd. (unreported decision delivered 23 March 1983). The criterion for associated jurisdiction may be said to be whether there is a common substratum of facts relating to the cause of action 1n respect of which jurisdiction exists under the Trade Practices Act and to the cause of action sought to be attached thereto. Mr. Malcolm QC, counsel for the applicant, described the present case as a paradigm one and I am inclined to agree. The facts alleged in support of the claim under s.52 and the facts alleged in support of the claim in defamation are not only similar but are for all practical purposes identical. The jurisdiction of this court to entertain the claim in defamation must be determined on the basis of the facts alleged in the statement of claim, assumed for the purpose of present proceedings to be correct. In that event and consistent with the views expressed by the majority of the High Court in Philip Morris Inc., with my own decision in Muller v. Fencott and with the views expressed by 13. St. John J. in Ainsworth Consolidated Industries Limited v. Universal Telecasters Queensland Limited (unreported decision delivered 11 November 1982), the answer to this question must be - yes. In the light of these answers it 1s appropriate that the notice of motion be dismissed as it was common ground that 1t sought to raise no issues other than those referred to in the case stated. The formal order should, I think, answer each of the questions reserved for determination of the court, dismiss the notice of motion and direct that the respondents pay the applicant's costs of the motion and case stated, to be costs in the cause. I certify that this and the twelve preceding pages are a true copy of the Reasons for Judgment herein of his Honour Mr. Justice Toohey DY wer Fhrr Associate Date: 19 April 1983