' a& " JUDGMENT No. 533/21 TRADE PRACTICES - misleading and deceptive conduct - proposed telecast of disputed consumer's complaint about hair replacement services - prescribed information provider - scope of statutory immunity - construction and object of s.65A Trade Practices Act 1974 - extended operation of Act. s.6(3) - consumer as principal contravenor - application of s.65A to consumer's conduct - whether conduct in trade or commerce - television licensee as accessory - requirement for intention - knowledge of falsity - reckless disregard - knowledge of dispute insufficient - application of S.65A to accessorial liability - balance of convenience - private loss - public interest - opportunity to respond - freedom of speech and press. - 'e\ -CQCT 1937 | REDETAL Coury OF '} ®USTRALIA PRINCIPA fan REGISTRY rae) Trade Practices Act 1974 s. 6(3), 52, 65A, 80(1), 80(2 Co-Operative Bulk Handling Ltd v Waterside Workers' Federation of Australia (1983) 51 ALR 79 ! Barneys Blu-crete Pty Ltd v Australian Workers' Union (1979) 43 ' FLR 463 OD Transport v Western Australian Government Railways Commission (1986) 71 ALR 190 Bullock v Federated Furnishing Trades Society of Australasia (1985) 5 FCR 464 R v Brislan; Ex parte Williams (1935) 54 CLR 262 Jones v The Commonwealth (No. 2) 112 CLR 206 Universal Telecasters (Queensland) Ltd v Guthrie (1978) 32 FLR 360 Universal Telecasters (Queensland) Ltd Vv Ainsworth Consolidated Industries [1983] ATPR 40-384 Global Sportsman Pty Ltd v Mirror Newspapers Ltd (1984) 55 ALR 25 Australian Ocean Line Pty Ltd v West Australian Newspapers Ltd (1985) 58 ALR 549 Horwitz Grahame Books Pty Ltd v Performance Publications Pty Ltd (1987) ATPR 40-764 Handley v Snoid (1981) ATPR 40-219 ok 2. Barton v Croner Trading Pty Ltd (1984) 3 FCR 95 W. and A. lticArthur Ltd v State of Queensland (1920) 28 CLR 530 R v Gates; Ex parte Maling (1928) 41 CLR 519 Bank of New South Wales v The Commonwealth (1948) 76 CLR l James v The Commonwealth (1936) 55 CLR l Larmer v Power Machinery Pty Ltd (1977) 29 FLR 490 Wells v John R. Lewis (International) Pty Ltd (1975) 25 FLR 194 Glorie v WA Chip and Pulp Co. Pty Ltd (1981) 39 ALR 67 Yorke v Lucas (1987) 61 ALR 307 Gertz v Welch 418 US 323 (1974) Advanced Hair Studio Pty Ltd and Rigadoon Pty Ltd v TVW Enterprises Limited No. WAG 111 of 1987 FRENCH J. 5 OCTOBER 1987 PERTH IN THE FEDERAL COURT ) OF AUSTRALIA ) WESTERN AUSTRALIA ) DISTRICT REGISTRY ) ) GENERAL DIVISION NO. WAG 111 of 1987 BETWEEN: ADVANCED HAIR STUDIO PTY LTD and RIGADOON PTY LTD Applicants and TVW ENTERPRISES LIMITED Respondent MINUTE OF ORDER JUDGE MAKING ORDER: FRENCH J. DATE OF ORDFR: 5 OCTOBER 1987 WHERE MADE: PERTH THE COURT ORDERS THAT: 1. The motion is dismissed. 2. The costs be reserved. . Note: Settlement and entry of orders 1s dealt with in Order 36 of the Federal Court Rules. IN THE FEDERAL COURT ) OF AUSTRALIA ) WESTERN AUSTRALIA ) ) ) DISTRICT REGISTRY GFNERAL DIVISION NO. WAG 111 of 1987 BETWEEN: ADVANCED HAIR STUDIO PTY LTD and RIGADOON PTY LTD Applicants and TVW ENTFRPRISES LIMITED Respondent CORAM: FRENCH J. 5 OCTOBER 1987 REASONS FOR JUDGMENT The Channel Seven news and current affairs programme "State Affair" 1s broadcast on week nights at 6.30 pm by TVW Enterprises Limited ("TVW"). It is shortly to include a seqment dealing with a process of prosthetic hair replacement, known as "Hair Fusion". One of the persons interviewed for that segment 1S Mr Ron Dunwoody, a dissatisfied customer of the Advanced Hair Studio at Albany Highway, Cannington. The proprietors of that business say that Mr Dunwoody's complaints are without foundation and amount to misleading and deceptive conduct in trade or commerce. 2. Pending the hearing of a substantive application they seek an interim injunction against TVW designed to prevent his allegations going to air. TVW contends that it 1s exempted from any liability to injunctive relief because of the operation of s.65A of the Trade Practices Act 1974. The case raises questions about the application of consumer protection provisions of the Act to television and radio broadcasts. It 1S necessary first to set out the factual circumstances so far as they appear from affidavits filed to date. At this stage however, the Court does not finally decide any issue in the case. The evidence, as 1s often the case in interlocutory proceedings, is scanty and incomplete. The rules governing admissibility are different from those applicable at trial - Co-Operative Bulk Handling Ltd v Waterside Workers' Federation of Australia (1983) 51 ALR 79, 87; Barneys Blu-crete Pty Ltd v Australian Workers' Union (1979) 43 FLR 463, 465-6; OD Transport v Western Australian Government Railways Commission (1986) 71 ALR 190, 193. The evidence is reviewed in order to determine whether the applicant has satisfied the basic criteria for the grant of an interlocutory injunction:- 3. 1. That there is a serious question to be tried on each of the elements of the claimed cause of action. 2. That the balance of convenience favours the grant. Those criteria are interdependent in the sense that the strength of the applicants' claim may determine how marked a balance of convenience will justify the grant of relief - Bullock v Federated Furnishing Trades Society of Australasia (1985) 5 FCR 464, 472. Factual Background On 5 May 1987 Mr Ron Dunwoody visited the Advanced Hair Studio at Albany Highway, Cannington. Craig Saytos, a trainee Manager at the Studio, showed him a video illustrating the hair fusion process. It 18 said to involve the "fusing" of either synthetic or human hair to 8 "fusion points" around the human head. He explained to Dunwoody that he could have all the hair he wanted fitted in one sitting for $1,395.00 or by a more expensive three stage process for $2,495.00. Dunwoody, he said, opted for the one step prosthesis. Saytos completed a standard form which the client then signed. + sens Ser aes sme 4. This form set out specifications which included style, hair shades, wave pattern, hair length and type of hair to be used. Under the heading "Hair Quantity" there were 5 options specified they being:- "1. Heavy 2. Medium 3. Light Medium 4. Light 5. Strand by Strand" A box against the entry "Medium" contained a cross. A section of the form dealing with price acknowledged payment of a deposit of $695.00 and noted a balance of $700.00 to be paid at fitting. Under the heading "ADVANCED HAIR STUDIOS CONSUMER PROTECTION PLAN" the following words appeared:- "Our obligation to you is to prepare and apply hair replacement that appears natural as to colour and blend, and at completion of final fitting you may determine satisfaction. If you are not satisfied after we have completed your new hair, we will remove the hair and there is no further cost or obligation to you." On 16 September Dunwoody attended at the Studio for his fitting and when it was complete told Saytos that 1t was "spot on at the back" but that he was "not sure of the front". He said he had not realised that the hair would be so thick but thought it would be interwoven with his own. 5. Saytos invited him to return the following day for a complimentary shampoo and said "if you don't like 1t we can remove it for you". Dunwoody agreed to come back. It does not appear from the evidence whetrer he did return. It 1s clear that he did not receive any refund at that time. Given that one of Dunwoody's complaints related to difficulty in gettinq a refund, there 1s a puzzling gap in the affidavits on this point. The evidence next takes up the narrative on 25 September when Bryan Hoskin, the State Manager for the applicants, was informed by the receptionist at their Cannington premises that people from the State Affair programme had been in touch regarding Dunwoody. He contacted Mario D'Orazio, a presenter employed by TVW Enterprises Limited. D'Orazio told him that State Affair was planning to do a story on Advanced Hair Studios as a result of an approach by Dunwoody. The substance of the story was that he was a pensioner who claimed to have been misled by television advertising on the part of Advanced Hair Studios and who had experienced difficulty in recovering a promised refund. 6. Hoskin formed the impression from his conversation with D'Oraz1o that the complaint related to television advertising by Advanced Hair Studio of a "Strand by Strand Replacement Technique". That advertising campaign however, had commenced after Dunwoody signed his form in May, although before the work was done in September. Hoskin pointed this fact out to D'Orazio. He told D'Orazio, who had invited him to appear on television to respond, that he would not otherwise comment on the complaint but would get in touch with his superiors in Melbourne. On 26 September, he made contact with Dunwoody who told him among other things that he was not happy with the treatment he had received from Saytos and that the advertising of the "Strand by Strand Technique" was "not all that 1t was cut out to be". The evidence 18, again, curiously incomplete on the content of Dunwoody's complaint about the relationship between the advertising of the Strand by Strand process and the service that he actually received. The news editor of TVW, Wilson Owen, conceded that his employer has a video tape of an interview with Dunwoody. The interview as he explained 1t concerns a hair unit supplied and fitted by the applicants and was recorded for 1nclusion in a proposed segment on the subject of the "hair fusion" process generally. 7. The final content of the seqment has yet to be determined and some parts of the Dunwoody interview may be the subject of editorial deletion. Hoskin says that if telecast as proposed, the "State Affair" programme will cause irreparable damaqe to the applicants' business. There do not appear to have been any steps taken to follow up D'Orazio's invitation to comment on this complaint so that the applicants' side of the story would be included in any broadcast. Even allowing for the exigencies of time, the evidence has some surprising and rather frustrating gaps. Nevertheless it can be concluded, subject to the general qualifications affecting findings in interlocutory proceedings, that the applicants have shown a serious case to be tried on the following factual issues:- l. That Dunwoody, a former customer, has complained to TVW about the service he received from the Advanced Hair Studio at Cannington. 2. That he has expressed his dissatisfaction in an interview given to TVW for probable inclusion in the State Affair programme. 3. That his complaint relates to the failure of the applicants to apply a "Strand by Strand Hair Replacement" - the evidence as to the precise nature of his complaint in this regard being negligible. @. 4. That he has alse complained ahout difficulty in obtaining a refund. 5. That he contracted for a single-sitting full hair-fitting and that he so contracted oefore the Strand by Stranc »rocess was advertised - althcuah 1t 1S notable that the form he sigqnec does contain a reference under the term "Hair Cuantitv" to "strand by strand". The sidqnificance of this entry was not adverted to in araument. 6. That he was offered a refund on the same day that the fitting was carried out. 7. That TVW will, unless restrained, show a nortion of the interview with Dunwoody disclosinda the substance of his complaint adaainst Advanced Hair Studio. Statutory Framework The apnlicants contend that the proposed broadcast will be a contravention of s.52 of the Trade Practices Act by TVW. However the alternative and, as it turns out, the principal thrust of their submissions 1s that 1t 1S Dunwoody who 1s contravening the Act and that TVW will be aiding anda abetting that contravention if 1t puts his complaints to air. Section 52 is said to apply to Dunwoody in this case because his conduct will "take place in a television broadcast" thereby attracting the extended operation of the Act' under sub-s.6(3). Section 52, which appears in Division 1 of Part V, provides, 1n reliance upon the corporation's power (Constitution s.51(xx)):- 9. "52(1) A corporation shall net, in trade or commerce, engage in conduct that 1s misleading or deceptive or 1s likely to mislead or deceive. (2) Nothing in the succeeding provisions of this Division shall be taken as limiting by implication the qenerality of sub-section (1)." The relevant extension of the operation of the Act to natural persons is derived from sub-s.6(3). That sub-section relies upon s.5l(v) of the Constitution which confers legislative power with respect to "postal, teleqraphic, telephonic and other like services". The "like services" have been held to include radio - R v Brislan; Ex parte Williams (1935) 54 CLR 262 - and television broadcasting - Jones v The Commonwealth (No. 2) 112 CLR 206. Sub-section 6(3) provides:- "(3) In addition to the effect that this Act, other than Part xX, has as provided by sub-section (2), Divisions 1 and 1A of Part V have, by force of this sub-section, the effect they would have if - (a) those Divisions (other than section 55) were, by express provision, confined in their operation to engaging in conduct to the extent to which the conduct involves the use of postal, telegraphic or telephonic services or takes place in a radio or television broadcast: and (b) a reference in those Divisions to a corporation included a reference to a person not being a corporation." Accessorial liability to injunctive relief 1s created by sub-s. 80(1):- ween eee oe 10. "80(1) Subject to sub-sections (1A) and (1B), where, on the application of the Minister, the Commission or any other person, the Court 1s satisfied that a person has engaged, or 1S proposing to engage, 1n conduct that constitutes or would constitute - (a) a contravention of a provision of Part IV or V; {b) attempting to contravene such a provision; (c) aiding, abetting, counselling or procuring a person to contravene such a provision; {d) anducing, or attempting to induce, whether' by threats, promises or otherwise, a person to contravene such a provision; (e) being in any way, directly or indirectly, knowingly concerned in, or party to, the contravention by a person of such a provision; or (£) conspiring with others to contravene such a provision, the Court may grant an injunction in such terms as the Court determines to be appropriate." The power to grant an interim injunction 1s found in sub-s.80(2):- "80(2) Where in the opinion of the Court it 15s desirable to do so, the Court may grant an interim injunction pending determination of an application under sub-section (1)." TVW relies upon s.65A of the Act which provides:- "65A.(1) Nothing 1n section 52, 53, 53A, 55, S5A or 59 applies to a prescribed publication of matter by a prescribed information provider, other than - (a) a publication of matter in connection with - (1) the supply or possible supply of goods or services; ll. (i1) the sale or grant, or possible sale or qrant, of interests 1n land; (i121)the promotion by any means of the supply or use of goods or services; or (iv) the promotion by any means of the sale or grant of interests in land, where - (v) the goods or services were relevant goods or services, or the interests in land were relevant interests in land, as the case may be, in relation to the prescribed information provider; or (vi) the publication was made on behalf of, or pursuant to a contract, arrangement or understanding with - (A) a person who supplies goods or services of that kind, or who sells or grants interests in land, being interests of that kind; or (B) a body corporate that is related to a body corporate that supplies goods or services of that kind, or that sells or grants interests in land, being interests of that kind; or (b) a publication of an advertisement. (2) For the purposes of this section, a publication by a prescribed information provider 1s a prescribed publication if - (a) in any case ~ the publication was made by the prescribed information provider in the course of carrying on a business of providing information; or (b) in the case of a person who is a prescribed information provider by virtue of paragraph (a), (b) or (c) of the definition of "prescribed information provider" in sub-section (3) (whether or not the person is also a prescribed information provider by virtue of another operation of that definition) - the publication was by way of a radio or television broadcast by the prescribed information provider." 12. Section 65A - Origin and Purpose It 1S appropriate to pay some regqarc to the aenescis and purpose of s.65A. It was enacted by the Statute Law (Miscellaneous Provisions) Act (No. 2) 1984 and came into effect on 2 Qctober 1984 some 10 years after the commencement of tke Trade Practices Act. In that decade there had been only ae few but significant decisions on the application of s.52 to statements published by the press or the electronic media. None of these preceded the report of the Trade Practices Review Committee in August 1976 ("the Swanson Committee Report"). This perhaps explains the absence of reference to any suggested exemption for press or electronic media from the application of Part V of the Act. At para.10.58 of its report the Committee wrote:- «ewe consider that in general the Act should apply across the board and be admissible of exceptio.s only where a case for public benefit can be made out, or where Parliament has specifically legislated to regulate the area." 13. There were already in rlace _from the original enactment specific defences under s.85 applicable to publishers = amond others. The defences under sub-s.85(1) of reasonable mistake, reasonable reliance on information supplied, the act or default of a third party and accident are applicable only to prosecutions under Part VI and do not operate in respect of civil proceedings. Sub-section 85(3) nrotects the person who publishes advertisements 1n the ordinary course of his business where he does not know and has no reason to suspect that the publication could amount to a contravention under Part V. This defence appears to extend to civil proceedings. The responsibility under the Act of newspaper proprietors and telecasters for what they publish began to be explored in 1978. In Universal Telecasters (Queensland) Ltd v Guthrie (1978) 32 FLR 360 at 377 Franki J., with whose reasons Bowen CJ substantially agreed, said:- "...I have come to the conclusion that, in general, where a television station telecasts an advertisement that contains certain spoken words, 1t 18 proper to hold that the television station has made a statement." 14. That case concerned a prosecution for a treach of para.53(e) of the Act and the application of the 5.25 defences. In Universal Telecasters (Queenslanc) Lta v Ainsworth Consolidated Industries [1983] ATPR 40-384, the Full Court refused to strike out a statement of claim alleging that the licensee of Channel TVO-0 in Brisbane telecast material in a news nrogramne concerning the respondent that was misleading or decentive contrary to s.52. The Court concluded only that the claim was not so clearly untenable that 1t could not possibly succeed. It was nevertheless a significant indicator of the possible application of s.52 to the publication of news by newspaners or electronic media. That application became clear in the decision of the Full Court in Global Sportsman Pty Ltd v Mirror Newspapers Ltd (1984) 55 ALR 25. It was there held on a case stated that publication of statements, including statements of opinion made in the ordinary course of news, can constitute conduct which is misleading or deceptive or likely to mislead or deceive within the meaning of s.52. 15. In the course of a joint judgment the Court reflected upon the issue of freedom of speech in relation to s.52 which, in the light of submissions by counsel for TVW in this case, bears repetition. "..ethe meaning of s.52(1) cannot be controlled by the doctrine of freedom of speech, which incorporates the freedom of the press. Although there 1s no right to speak freely given by the Constitution or by statute, free speech 1s of fundamental importance. But in this, as in other areas, freedom does not mean licence but freedom under law in a civilised society: cf Samuels v Readers' Digest Association Pty Ltd (1969) 120 CLR l, per Barwick CJ at ppl4 and 15. Speech us free if it is free from unwarranted restrictions. Freedom of speech 1s but one of a number of competing rights and interests which must be accommodated. Part V of the Act 1s broadly concerned with "Consumer Protection", which 1s 1tself an important matter of public interest. Like sedition, defamation, obscenity, copyright, etc, consumer protection can justify some restriction upon what may be published. The ambit of any restriction 1s a matter for Parliament to the extent that the subject is within its constitutional power." (at 29) It 1s also significant that the joint judgment reaffirmed the proposition that whether or not sub-s.52(1) 1s contravened does not depend upon the publisher's intention or belief but upon whether the statement in fact contains or conveys a meaning which 1s false. The progress of this application of s.52 in relation to newspapers reached its climax in Australian Ocean Line Pty Ltd v West Australian Newspapers Ltd (1985) 58 ALR 549. There Toohey J. granted an application for damages in relation to a report of passenger criticism of services and conditions aboard a cruise ship, the MS Dalmacija. It is notable however that his Honour 16. held that the mere publication by a newspaner of reported opinions of passengers which did not accord with the facts would not, of itself, constitute a contravention of s.52:- "There must be something in the articles referable to the publisher's conduct which is likelv to lead a reader into error. Thus a statement 1n one of the reports that a majority or very large number of passengers on the Dalmacija had made particular criticisms of the ship and the conduct of the crulse, a statement suggesting that the criticisms of particular passengers or passengers at large were well founded, a statement by the newspaper about the ship and the cruise or a statement apparently containing the opinion of the newspaper about the ship and the conduct of the crulse 1s each capable of constituting misleading or deceptive conduct. In each case the statement goes beyond the mere reporting of opinions by others and contains a representation by the newspaper itself." (page 587) The possible liability of the newspaper in that case had already become apparent by 19 April 1983 when his Honour declined to accede to a motion to summarily dismiss the proceedings - Australian Ocean Line Pty Ltd v West Australian Newspapers Ltd (1983) 47 ALR 497. By 21 February 1985 when his Honour gave final judgment in the case the fact of the proceedings and the interlocutory decision had already given rise to a reaction which culminated in the enactment of s.65A. The first significant step in that direction was taken in February 1984 when the Government published a Green Paper ~ The Trade Practices Act - Proposals for Change - which embodied what was described as an Exposure Draft of a proposed bill to amend the Trade Practices Act. 17. The Bill included an amendment to s.52 by introduction of sub-s.(1A) in the following terms:- "(1A) For the purposes of sub-section (1), conduct shall not be taken to be misleading or deceptive or to be likely to mislead or deceive by reason only that it 1s defamatory." The most cursory examination of this provision will demonstrate that 1t would have had no effect at all upon the law. The Green Paper, which took the form of an Explanatory Memorandum to the proposed amendments, referred to uncertainty in the relationship between the Act and defamation laws in the light of the Australian Ocean Line case and the decision in Universal Telecasters (Queensland) Ltd v Ainsworth (supra). With perhaps unconscious humour the author of the paper went on at para.70:- "70. More far reaching proposals have been made by major newspaper proprietors, that the media be wholly exempted from the operation of section 52 (and sections 53, 53A, 55, 55A and 59), except in respect of the publication of advertising (already covered by sub-section 85(3)) and certain promotional conduct. These proposals have not been accepted at this stage, but further comment would be welcome on this matter, which is a sensitive and difficult one." Sub-section 52(1A) never became law, but the more far reaching proposals in the form of s.65A did. Attorney-General in his second reading speech on 18. The purpose of the provision was described by the then tre Statute Law (Miscellaneous Provisions) Bill, set out in the Hansard Report of Debates in the House of Representatives for 13 September 1984 p.129 exemption, way:- 6:- "A new section 65A 1S to be inserted in the Trade Practices Act 1974 to clarify the application of certain of the consumer protection provisions of that Act to the media and other persons who carry on business of providing information. Recent decisions of the Federal Court have suggested that a newspaper publisher may be taken to have engaged in conduct that 1s misleading or deceptive for the purposes of section 52 of the Trade Practices Act if the newspaper contains inaccurate information. The Government recognises the need to maintain a vigorous, free Press, as well as an effective and enforceable Trade Practices Act. In doing so, the Government recognises that, whilst the problem may have been highlighted by a defamation action, similar considerations apply in respect of actions for negligent mis-statement and actions for injurious falsehood. The Government also recognises that the difficulties in this area are experienced not only by the main newspaper, Magazine and television publishers, but also by a wide range of other people who provide information. New section 65A will operate to exempt the media and other persons who engage in businesses of providing information from the operation of those provisions of Division 1 of Part V of the Trade Practices Act which could inhibit activities relating to the provision of news and other information." at The speech went on to describe the limits on the "These provisions ensure that information providers are not exempt from the consumer protection provisions of the objective of which was described in the following 19. the Trade Practices Act in respect of the provision of unformation where they have what might be regarded as a commercial interest 1n the content of the information. In such cases, information providers must take the same responsibility for the accuracy of information as any other person who publishes information in trade or commerce. This can occur, for example, where a newspaper has agreed to publish a "news" item about a product in exchange for the product supplier taking out paid advertising in that publication." The Explanatory Memorandum circulated at the time did no more than outline the terms of the proposed new section. TVW as Principal Contravenor Counsel for the applicants contended first that the proposed conduct of TVW in telecasting the State Affair segment with the Dunwoody interview would be in contravention of s.52. This contention raises the preliminary question as to the direct applicability of the exemption under s.65A. TVW, it was said, did not enjoy the protection of the provision because, 1n broadcasting the segment it was, in effect, promoting its own current affairs programme. Broadcasting of "State Affair", it was said, involved the provision of information services by TVW as a "prescribed information provider". These services were said to be "relevant services" within the meaning of s.65A(3). 20. The broadcasting of the "hair fusion" segment would, because it involved the provision of information, constitute a publication of matter in connection with the supply or possible supply of those relevant services. The publication would not, therefore, attract the protection of s.65A. This construction, if correct, robs s.65A of much 1f not all, practical operation. It 1s inconsistent with the evident purpose of that provision which, in the interests of " a vigorous, free Press", 15 to release newspaper and electronic media proprietors from what were seen by the legislature as undesirable inhibitions on their activities relating to the provision of news and information. The point was considered by Wilcox J. in Horwitz Grahame Books Pty Ltd v Performance Publications Pty Ltd (1987) ATPR 40-764 at 48,275 where his Honour said of the provisions of s.65A relating to "relevant goods and services":- "The effect of these provisions 1s that the section does not exclude sec. 52 1n a case where the relevant matter relates to the supply, or possible supply, of goods or of services, being goods or services put out by the information provider itself. Thus a_ promotional statement in a newspaper or a magazine, or. on television, regarding future issues of that newSpaper or magazine or future programs of that television channel 1s excluded from the operation of sec.65A and, therefore, remains governed by sec.52 and the other provisions -referred to in the opening words of , sec.65A(1). mer eo 21. In the present case I do not think that any of the items referred to fall within the qualification contained in para.(a) of sec.65A(1). It 18, no doubt, true, ina general sense, that the publisher of the magazine, in inserting the material referred to, henes to interest readers in purchasing future issues. But, I suppose, that same statement may be made about everything which 1s published in a newspaper or in a magazine, including straight news items. Each of the items published are intended to stimulate interest and to induce readers to purchase future issues. I think that the cualification In para.(a) 1S intended to relate to what might be called advertisements for, or promotions of, future issues; ""self-advertisements" corresponding with advertisements published on behalf of others, which are dealt with by para.(b). It 1S important to note that para.(a) refers to particular published "matter", which Matter must be "in connection with" the supply or possible supply of qoods or services." His Honour did not reach any final conclusion about the application of s.65A in the case before him, so his remarks may be taken as obiter. Nevertheless, I respectfully agree with them. I would go a little further and say that the reference in sub-s.65A(1)(a) to "a publication of matter" suggests that what 1s of importance 1S the content and not the general nature of the material in question. In my opinion therefore, both the language and the purpose of the section conspire against the applicants' submission. Their case on this point 1s so doubtful that I would not be prepared to grant any interlocutory relief on the basis of an alleged contravention of s.52 by TVW as principal. > 22. The Consumer as Principal Contravenor The applicants put their case upon the alternative basis that, even 1f the proposecd telecast would not attract the application of s.52 with respect to TVW, 1t would amount to a contravention of that section by Mr Punwoody. It was submitted that TVW may in such circumstances still be liable to an interlocutory order because in putting Dunwoody's comments to air it would aid and abet his contravention. The liability to interlocutory relief would then derive directly from sub-s.80(1) which authorises the grant- of injunctions not only against persons who contravene provisions of Parts IV and V of the Act but also against various defined classes of accessory. Section 52 applies in its terms to the conduct of corporations. It could only apply in this case to Mr Dunwoody by virtue of its extended operation to natural persons who engage in conduct that "takes place in a_e...television broadcast" - sub-s.6(3). It is necessary therefore for the applicants to identify conduct on his part which in the language of para.6(3)(a):- 22, ",..takes nlace in a radio or television Sroancasr," The only act on the nart of Mr Dunwoody which can be relied upon for that nurpose in this case, 1s the making of a pre-recorded video-taped statenent ahout Advanced Hair Studios for later telecasting by TV. The statement at the time 1t was maGe obviously did not literally "take place in 4 radio or television broadcast". In this aspect the facts can be distinquished from those in Handley v Snoid (1981) ATPP 40-219 where sub-s.6(3) was held applicable to the conduct of a pon band performing live on television:- "They performed live on a television program and this was conduct engaged in which was likely to mislead or deceive which "took place in a television broadcast" within the meaning of that subsection." - per Ellicott J. at 42,990. (The orders made in this case were varied by the Full Court in certain respects not affecting the above observations - Snoid v Handley (1981) 38 ALR 383.) The question remains whether the telecasting of a pre-recorded statement intended for such dissemination = can constitute conduct by the maker of the statement in a television broadcast. - Two approaches to the application of sub-s.6(3) are open as Donald and Heydon - Trade Practices Law Vol. 1 observed in an early but helpful commentary on the section (para.2.4.5):- 24. " ...the section mav, in practical terms, add little to the reach of the Act because it 1s confined to conduct taking place in a broadcast. Which persons engage in conduct that takes place in the course of a broadcast? It 1s suggested that only radio or television licensees engage in such conduct, apart from the persons operating the equipment. The person writing or paving for the material broadcast may not. Licensees are likely to be almost always corporations so that the power in s.51(xx) 1s sufficient. Furthermore, broadcasters of advertisements have the protection of the s.85(3) defence for publication in the ordinary ccurse of business. Advertisements would account for most Situations where Part V, Division 1 conduct could occur in the course of broadcasting. The contrary argument 1s that that (sic) the person who places the advertisement for broadcast 1s the person who falsely represents "in a radio broadcast" (to use $.53(a)). The licensee is simply broadcasting it for him. The false representation 1s that of the advertiser. The medium is the broadcast. The advertiser has therefore falsely represented in a broadcast." Apart from the McLuhanesgue flourish at the end of the passage, the second approach 1s, I think, to be preferred. It is, 1f anything, too narrow insofar as 1t might be seen to exclude broadcasters and telecasters from the application of sub-s.6(3). Ultimately the question is one of fact but there 1s a helpful analogue in the reasoning used by the Full Court in Barton v Croner Trading Pty Ltd (1984) 3 FCR 95. There it was held that a wholesaler supplying falsely labelled goods to a retailer may be taken to have made the representations embodied in the labels at the time they are communicated to the consumer, that is, by way of retail display. 25. In that case the prospective purchasers of goods never made contact with the wholesaler. It was accepted by the court that the reta1ler was at liberty to do what it liked with the goods and the wholesaler had no control over it in that regard. Nevertheless the wholesaler's conduct was characterised aS a projection by 1t of the goods into the course of trade, accompanied by representations as to their history, standard and sponsorship intended for publication to potential purchasers in the form of members of the public who might be expected to see the labels on display with the goods at the retail outlet. The retailer was not its agent, but rather a convenient medium, a channel of communication between the wholesaler and consumers. I see no reason why a similar approach cannot be taken to the question whether or not the acts of a person making recorded statements for dissemination in a television broadcast can be said to "take place ina ...television broadcast". It appears from the provisions of the Act relating to its extended operation that the legislature intended it to have the widest application consistent with the limits of Commonwealth constitutional power. 26. On the other hand it might be said that a broad construction of the application of sub-s. 6(3) 1S '*nconsistent with the protective policy of s.65A. I do not think however that the sub-section can be cut down by reference to the policy of a provision which 1S some 10 years 1ts Junior. Applying the kind of reasoning used in Barton v Croner Trading Pty Ltd and consistently with the wide reach of the Act, the language of sub-s.6(3) can accommodate the conduct of one who makes a recorded statement for later transmission by a television licensee. In my opinion, therefore, there 1s a serious question to be tried that Dunwoody's proffering of a statement' for pre-recording and later telecasting in whole or in part will, if the statement 1s telecast, constitute conduct which takes place in a television broadcast. The Application of Section 65A to Dunwoody's Conduct Dunwoody's statement may 1f broadcast "take place in a television broadcast" within the meaning of sub-s.6(3). The act of the television licensee in publishing his statement is necessary to enable it to answer that description. 27. That raises the question whether the licensee's participation can attract to Dunwoody's conduct the immunity conferred by s.65A. This 1S simply a matter of construction. To fall within the exemption, the conduct must answer the descrirtion "prescribed publication of matter by a prescribed information provider". The conduct involves the following elements which on the reasoning in the preceding section are necessary for its characterisation as "taking place in the television broadcast":- 1. The making of the statement by Dunwoody. 2. His consent to the pre-recording of the statement. 3. H1S consent to the broadcast of the statement or part of it. 4. The broadcast by TVW of the statement or part of it. On any view these elements are not all encompassed by the phrase "prescribed publication of matter by a prescribed information provider". Nor do they, taken compendiously, answer that description. Section 65A does not, in my opinion, confer any exemption upon Mr Dunwoody. Nor 18 there any particular reason why it should. The section was enacted in the interests of freedom of the press and media. That purpose does not supply any 28. justification for protecting third parties such as rival traders, consumers or others from the anplication of s.52. Dunwoody's Conduct - In Trade or Commerce? It was submitted by counsel for TVhw that Dunwoody's conduct was, 1n any event, not in trade or commerce within the meaning of s.52 of the Act. The gravamen of the argument was that the mere voicing of a complaint about a transaction that had been completed was not sufficiently connected to that transaction to attract the description of conduct in trade or commerce. It 2s well established that the communication of information can constitute conduct in trade or commerce - W. and A. McArthur Ltd v State of Queensland (1920) 28 CLR 530, 547; Rv Gates; Ex parte Maling (1928) 41 CLR 519, 530; Bank of New South Wales v The Commonwealth (1948) 76 CLR 1, 381; James v The Commonwealth (1936) 55 CLR 1, 60; Larmer v Power Machinery Pty Ltd (1977) 29 FLR 490; Wells v John R. Lewis (International) Pty Ltd (1975) 25 FLR 194, 205. Proceedings are frequently instituted in this court which relate to the communication of information in the context of what might broadly be called, pre-transactional misrepresentation. 29. It 1S not necessarv, however, that a Staterent he related to some commercial transaction in order to ccnstitute conduct in trade or commerce. It may do no more than contribute to the sum of information (including opinions) made available to the public or sections thereof as prospective consumers of qoods or services. Whether 1t amounts to conduct in trade or commerce ir fact, will depend upon the particular circumstances and the character of the statements. Pronouncements made on a commercial subject matter may comment on trade or commerce but not necessarily be "ir trade or commerce". There 1s sometimes a fine line to be drawn. A public statement on the benefits of a particular industry, which statement is designed to protect the commercial interests of its members, can constitute conduct in trade or commerce even though viewed from one perspective it may have the character of a contribution to an essentially political debate - Glorie v WA Chip and Pulp Co. Pty Ltd (1981) 39 ALR 67, 75. A fortiori a statement by a dissatisfied consumer to other prospective consumers of a particular service can answer the description "conduct in trade or commerce". 30. I am satisfied that there 18 a scriousS question to be tried on the issue whether Nr Dunwoody's conduct in aiving the pre-recorded statement to TVW for telecastina canstitutedq conduct in trade or commerce. Accessorial Liability and the Telecaster The next question 1s whether TVW would be aiding or abetting a contravention, if contravention there be, by broadcasting Dunwoody's complaint. This, too 1S to be answered without reference to the protective policy of s.65A which postdates by a decade the relevant provisions of sub~s.80(1). The provision of facilities and the intended actual transmission of the statement would, in my opinion, constitute the external elements necessary to establish that TVW proposes to aid or abet Dunwoody in the sense of that term as used in sub-s.80(1)(c). There 1S, however, another aspect of accessorial liability which was not addressed in argument. Section 75B of the Act in relation to contravention of provisions of Part IV and V, designates a class of accessory by the term "involved in a contravention" and defines that term as a reference to a person who:- ome, oy, a TT oe ff ak ie * 31. (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 andirectly, knowingly concerned in, or party to the contravention; or (d) Has conspired with others to effect the contravention. The term 1s then applied in other provisions of the Act, including s.82, where 1t 1s used to describe the range of persons liable for damages in connection with contraventions of Part IV or Vv. In Yorke v Lucas (1987) 61 ALR 307, the High Court held that a person could not be guilty of aiding and abetting within the meaning of para.75B(a) unless he had done so intentionally, that 1s, with knowledge of the requisite matters going to make up the contravention. In the case of a contravention constituted by misrepresentation the element of intention would require knowledge of the falsity. This view which extended to all accessorial classes defined in s.75B, was based on the ancestry of that provision in concepts drawn from the criminal law:- 32. "Notwithstanding that s.75B operates as an adjunct to the imposition of civil liability, its derivation is to be found in the criminal law and there 1s nothing to support the view that the concepts which it introduces should be given a new or special meaning." (at 312) The language of para.80N(1)(c) obviously has the same origin. On the authority of yorke v Lucas 1t must be qiven the same construction. On that basis, before [VW could be said to aid and abet Dunwoody's contravention by broadcasting his statement, 1t would have to be fixed with knowledge of its falsity. But the falsity 1S contentious. TVW 1s faced with two apparently conflicting accounts of his arrangements with Advanced Hair Studio. To know that Dunwoody's statement 1s disputed, 1s not to know that 1t 1s false. There may of course be cases where a television licensee 1s fixed with knowledge of the falsity of a disputed statement. Clear evidence might be put before 1t to demonstrate that a statement made to 1t 1S untrue. In the present case 1t may emerge that sufficient evidence has been put before TVW to achieve that result, but on the material before the Court that seems doubtful. There may be an arguable case in this regard, but at present 1t appears to be a weak one. 33. Insofar as recklessness cn the part of the telecaster may be sufficient to establish the relevant intention, I think the result 1s the same. Section 65A and Accessorial Liability Tf intentional aid to a contravention could be demonstrated aqainst TVW the question would still remain whether 1t would be protected from liability by s.65A. The unattractiveness of the proposition that press or media could be immune from liability for the knowing or reckless propagation of falsehood 1s readily apparent. It is difficult to accept that the legislature would have intended to effect such an immunity when s.65A was enacted. The origin of the section is found in concern generated by Australian Ocean Line Pty Ltd v West Australian Newspapers (supra) and Universal Telecasters (Queensland) Ltd v Ainsworth Consolidated Industries (supra). These cases involved allegations of direct contraventions of s.52 with its attendant strict liability. It 1S unlikely that any immunity from liability for knowing involvement in misleading and deceptive conduct was even contemplated by those whose interests were most directly affected. 34. The purpose of s.65A is inconsistent with such extensive protection. So too 1s its language which exempts certain conduct of prescribed information providers from the apnlication of "Section 52, 53, 53A, 55, SSA or 59". The Jiability to injunctive relief under sub-s.80(1) in the case of the classes of accessory there named derives directly from that section and not from any application of s.52 to their conduct. Section 65A would not operate, in my opinion, to exempt TVW from accessorial liability under sub-s.80(1) of the Act. The Balance of Convenience The applicants' State Manager, Mr Hoskin, has said that, if telecast incorporating Dunwoody's complaint as proposed, the State Affair programme will cause irreparable damage to the applicants' business. The nature and extent of the anticipated damage 1s not the subject of evidence. It can, however, be inferred that it 1s probable that some damage will flow to the applicants' reputation and thereby to its business 1f the complaint of this aggrieved consumer of their services goes to air. The impact of that broadcast will depend upon the part played by the complaint in the overall programme and whether the applicants are able to answer it in the same segment. bes Sl a 35. It seems that the presenter, Mr D'Orazio, dic invite the applicants, through Mr Hoskin, to comment on the complaint. It does not appear that they have taken up this invitation beyond Hoskin's statement to D'Orazio that the "Strand by Strand" advertising campaign had commenced after Dunwoody siqned his contract. The opportunity to respond to a consumer complaint in this way 1s, in my opinion, a significant factor on the balance of convenience. On Mr Hoskin's evidence there may be a succinct and reasonable answer to at least one aspect of Mr Dunwoody's grievances. It cannot be denied however, that for many members of the public there 1s no smoke without fire and that the mere making of an allegation, even if responded to immediately, will inflict some damage. It is not suggested that there 1S any prospect of economic damage to TVW if 1t were to be restrained from broadcasting Dunwoody's complaint. There would no doubt be inconvenience and possible waste of resources. The telecast would either be delayed, pending the substantive hearing, or would have to go to air without the Dunwoody portion. ere Trea! Taal ale DUC 36. There are competing public interests invelved, here 1s, I think, a specific public interest in tne free Flow of inforration relevant to the provision of consumer services. There 1S also a public interest in not being misled. Overall there 1s a broad interest in maintaining freedom of sneech ranifested ir a free press unhampered by unnecessary restrictions on its ability to present news and information. That freedom is cualified by legal constraints as the Full Court pointed out in Global Sportsman Pty Ltd v Mirror Newspapers [Ltd (supra). Within those constraints, however, it 1S a factor to be given considerable weight. How much weight 18S to be given to it in the present context, necessarily involves a balancing exercise. It involves considerations of the kind which I think are helpfully reflected in the judament of the US Supreme Court in Gertz v Welch 418 US 323 (1974) in the context of the first amendment prohibition against laws abridging "freedom of speech or of the press":- ",..there 1s no constitutional value in false statements of fact. Neither the intentional lie nor the careless error materially advances society's interest in "uninhibited, robust, and wide-open" debate on public issues. Although the erroneous statement of fact is not worthy of constitutional protection, it 1s nevertheless inevitable in free debate » And punishment of error runs the risk of inducing a cautious and restrictive exercise of the constitutionally guaranteed freedoms of speech and press. 37. The First Amendment rénulres that we protect some falsehood in order to nrotect speech that matters..." If for the word "constitutional" where it appears in that passage the word "social" is substituted, then there 15 disclosed an anproach which 1s applicable to the present case. In my opinion there are elements of the case advanced by the applicant which, while they may raise arguable issues, have a doubtful prognosis. The balance of convenience tends in favour of the applicants on economic impact. There 1s also a risk that the telecast may result in the propaqation of false factual material. Those factors are, I think, redressed by the opportunity for response and the public interest in avoiding unneccessary restrictions on the free flow of information. In all the circumstances, I am of the opinion that this 1S not a case in which an interlocutory injunction should be granted and I will dismiss the claim for that relief. bits ad te . tai 38. I certify that the preceding thirty seven (37) pages are a true copy of the reasons for judgment of his Honour Justice French. Associate: Severo VAs Qike pate: S Ockdloas \AST Counsel for the Applicants: Mr T. O'Connor Solicitors for the Applicant: Parker & Parker Counsel for the Respondent: Ms. C. McLure Solicitors for the Respondent: Keall Brinsden Date of Hearing: 2 October 1987 Date of Judgment: 5 October 1987