Australian Postal Corp v Pac-Rim No 3 Pty Ltd [1998] FCA 13

FEDERAL COURT OF AUSTRALIA

AUSTRALIAN POSTAL CORPORATION ACT - services reserved to Australian Postal Corporation - exceptions to reserved services - whether items delivered fall within exception to reserved services REMEDIES - injunction - whether injunction should be granted Australian Postal Corporation Act 1989 (Cth) ss 3, 27, 30, 31 Australian Postal Corporation v Streetfile Pty Ltd (Northrop J, 6 November 1996, unreported), considered AUSTRALIAN POSTAL CORPORATION v PAC-RIM NO. 3 PTY LTD (ACN 051 757 718) VG 117 of 1997 MARSHALL J MELBOURNE 19 JANUARY 1998

IN THE FEDERAL COURT OF AUSTRALIA

VICTORIA DISTRICT REGISTRY VG 117 of 1997

BETWEEN: AUSTRALIAN POSTAL CORPORATION

Applicant

AND: PAC-RIM NO. 3 PTY LTD (ACN 051 757 718)

Respondent

JUDGE: MARSHALL J

DATE OF ORDER: 19 JANUARY 1998

WHERE MADE: MELBOURNE

THE COURT ORDERS THAT: 1. It is declared that by delivering the items referred to in the particulars to paragraph 6 of the Applicant's amended statement of claim the respondent contravened s 29 of the Australian Postal Corporation Act 1989. 2. The application otherwise be dismissed. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA

VICTORIA DISTRICT REGISTRY VG 117 of 1997

BETWEEN: AUSTRALIAN POSTAL CORPORATION

Applicant

AND: PAC-RIM NO. 3 PTY LTD (ACN 051 757 718)

Respondent

JUDGE: MARSHALL J

DATE: 19 JANUARY 1998

PLACE: MELBOURNE

REASONS FOR JUDGMENT On 19 March 1997 the applicant, Australian Postal Corporation ("Australia Post") applied to the Court pursuant to s 31 of the Australian Postal Corporation Act 1989 (Cth) ("the Act") for relief in respect of certain conduct of the respondent which Australia Post alleged involved an infringement of its exclusive right to undertake services which the Act reserves to it. Australia Post sought a declaration that the respondent has engaged in conduct in contravention of s 29 of the Act. It also sought an injunction to restrain the respondent from engaging in conduct contravening s 29 of the Act. BACKGROUND (a) Australia Post and the Act Australia Post is a statutory corporation under s 13 of the Act. Pursuant to s 14 of the Act its principal function "is to supply postal services within Australia and between Australia and places outside Australia". Section 27 of the Act defines Australia Post's community service obligations. It provides as follows: "(1) Australia Post shall supply a letter service. (2) The principal purpose of the letter service is, by physical means: (a) to carry, within Australia, letters that Australia Post has the exclusive right to carry; and (b) to carry letters between Australia and places outside Australia. (3) Australia Post shall make the letter service available at a single uniform rate of postage for the carriage within Australia, by ordinary post, of letters that are standard postal articles. (4) Australia Post shall ensure: (a) that, in view of the social importance of the letter service, the service is reasonably accessible to all people in Australia on an equitable basis, wherever they reside or carry on business; and (b) that the performance standards (including delivery times) for the letter service reasonably meet the social, industrial and commercial needs of the Australian community. (5) In this section: 'Australia' includes Christmas Island and Cocos (Keeling) Islands, but does not include any other external Territory to which this Act extends." Division 2 of Part 3 of the Act is entitled "Reserved Services". Section 29 of the Act inter alia gives Australia Post the exclusive right to carry letters within Australia subject to certain exceptions identified in s 30 of the Act. Section 30 of the Act, so far as is material, provides as follows: "(1) The reserved services do not include any of the following: ... (b) the carriage of a letter relating to goods that is sent and delivered with the goods; (c) the carriage of a newspaper, magazine, book, catalogue or leaflet, whether or not directed to a particular person or address and whether or not enclosed in any sort of cover; ..." The word "letter" is defined in s 3 of the Act in the following way: "'letter' means any form of written communication that is directed to a particular person or address, and includes: (a) any standard postal article; (b) any envelope, packet, parcel, container or wrapper containing such a communication; and (c) any unenclosed written communication that is directed to a particular person or address;" Section 31 of the Act provides as follows: "(1) Where a person has engaged, or is proposing to engage, in conduct that involves, or would involve, an infringement of Australia Post's exclusive right to undertake the reserved services, Australia Post may apply to the Federal Court for relief. (2) The relief that may be granted includes an injunction and, at the option of Australia Post, either damages or an account of profits. (3) Where, in the opinion of the Federal Court, it is desirable to do so, the Court may grant an interim injunction pending determination of an application under subsection (1). (4) The power of the Federal Court to grant an injunction restraining a person from engaging in conduct may be exercised: (a) whether or not it appears to the court that the person intends to engage again, or to continue to engage, in conduct of that kind; (b) whether or not the person has previously engaged in conduct of that kind; and (c) whether or not there is imminent danger of substantial damage to Australia Post if the person engages in conduct of that kind." (b) The Respondent The respondent is incorporated pursuant to the laws of the Australian Capital Territory. It is the proprietor of the business name "Streetfile" and carries on business under that name. I will refer to the respondent henceforth in these reasons for judgment as "Streetfile". Streetfile is part of the PMP Communications group of companies ("the group"). The group is the largest commercial print, household distribution, news media and publishing operation in the Pacific Rim. According to Streetfile it was established "to assist the Australian business community communicate with their customers without incurring the costs associated with postage." It is the aim of Streetfile to attract business in the delivery of so much of printed communication material as it is lawfully able to deliver without infringing against the Act. (c) The relevant articles Australia Post alleged that Streetfile had contravened s 29 of the Act by its delivery of two items. (i) "THE FOXTEL ITEM" The Foxtel item comprised a single folded sheet of paper addressed "To The Resident" at a particular address. It ended with the words "Yours sincerely, Mark Booth, Chief Executive Officer, Foxtel". It was dated 9 December 1996. Attached to that sheet of paper in a way which enabled it to be easily detached was a discount voucher for connection to Foxtel's cable television service. This voucher also was addressed "To The Resident" at the same address referred to on the other part of the sheet. Accompanying the folded sheet and attached voucher was advertising material about the cable television service which identified the types of programs available on that service. Each item was enclosed in an envelope. The address printed on the folded sheet was visible through a transparent plastic window in the envelope. 46,784 such items were delivered by Streetfile. (ii) "THE MACQUARIE UNIVERSITY ITEM" This item consisted of three folded sheets of paper. The first carried the letterhead of Macquarie University ("the University"). It was addressed to "Dear Applicant". It thanked the recipient for listing the University in her or his preferences for tertiary study in 1997. It advised recipients of the availability of "new partial HECS scholarships" being offered by the University in 1997. The communication contained a second sheet which concluded with the words "Yours sincerely, Brian Spencer, Registrar and Vice-Principal". The third sheet, on University letterhead, was a form entitled "Macquarie Scholarships Application Form 1997". All three sheets were enclosed in an envelope addressed to a particular person at a particular address. 13,246 such items were delivered by Streetfile. THE COMPETING CONTENTIONS (a) "THE FOXTEL ITEM" Mr Derham QC, who appeared with Mr Almond, of counsel, for Australia Post submitted that the single sheet in the Foxtel item was a "letter" as defined in the Act. He noted that "letter" under that definition "includes ... any envelope ... containing (a written) communication". He contended that the inclusion in the envelope of advertising material did not mean that the whole delivery was not a letter. Ms Symon, of counsel, who appeared for Streetfile, submitted that the single sheet fell within s 30(1)(b) of the Act as a "letter relating to goods that is sent and delivered with the goods". She contended that the advertising material was a "catalogue" within the meaning of s 30(1)(c) of the Act. However, Ms Symon's primary submission was that the material in the Foxtel item fell within the definition of "leaflet" in s 30(1)(c) of the Act. (b) "THE UNIVERSITY ITEM" Mr Derham submitted that each document in the University item, ie, "the Dear Applicant" document and the application form was a letter, being a written communication directed to a particular person at a particular address printed on an envelope. Ms Symon submitted that each item was a leaflet. She also submitted that the items were not letters because none of the sheets contained in the envelope were directed to a particular person. THE ORIGIN AND INTENTION OF SECTION 30(1)(c) OF THE ACT The Hansard of the Senate debates which led to the insertion of s 30(1)(c) into the Act in 1994 were admitted into evidence without objection pursuant to s 15AB Acts Interpretation Act 1901 (Cth). Senator Bourne moved the relevant amendment. At 2017 of the Hansard of 19 October 1994, Senator Bourne said: "- by leave - I move (2) Clause 11, page 5, paragraph (d), lines 1 to 15, omit the paragraph, substitute: '(d) by omitting paragraph (1)(c) and substituting the following paragraph: "(c) the carriage of a newspaper, magazine, book catalogue or leaflet, whether or not directed to a particular person or address and whether or not enclosed in any sort of cover.";' (emphasis supplied) (3) Clause 11, pages 5 and 6, proposed subsection 30(1A) and the examples at the end of it, lines 34 to 38 (page 5) and lines 1 to 11 (page 6), omit the subsection and the examples. (4) Clause 11, page 7, paragraph (1), lines 8 to 13, omit the paragraph. These amendments seek to clarify the present act by exempting catalogues and leaflets and addressed envelopes and reserved services. The bill seeks to reserve the delivery of advertising material in addressed opaque envelopes from that exemption. This does not seem to us to be environmentally sound. We want the bill not to make plastic wrapping compulsory because most transparent plastic wrapping is not recyclable. Therefore, we do not think the proposal is very sensible. We want to make sure that paper envelopes could be used for this sort of mail. In our opinion, our amendments preserve and clarify the present position that exists under the old act, but they do not go any further. Australia Post was concerned, when its representatives came to see us, that the amendment might allow an addressed form of letter to pass as a leaflet. That is certainly not our intention. I believe that with this amendment we have got that right. Our amendments also remove the bundling provision and the definition of identical catalogues and leaflets on the grounds that they are redundant. The government believes that the laser etching of addresses onto catalogues and leaflets should and would be allowed. We endorse that interpretation as well. We certainly think that our amendments also achieve that goal. We hope that we have overcome what we thought were the legitimate problems that Streetfile, in particular, had." At the same page the relevant Government Minister, Senator Schacht, said that the amendment was not opposed on the basis that "it maintains the status quo under the 1989 act (sic)". He also said that: "The government will not oppose it on the grounds that it will continue to exempt catalogues and leaflets from Australia Post's exclusive right to carry letters under section 29 of the Australian Postal Corporation Act 1989, irrespective of whether or how they are wrapped or whether a name and/or address is stamped, stuck or printed on any of the catalogues or leaflets or any of the wrappers of the catalogues or leaflets." (emphasis supplied) Importantly, the Minister said that the reserved service would: "... continue to include generic or pro-forma letters which contain identical text and will not prevent the enclosure or attachment of a single sheet, a flysheet or an address slip with a catalogue or leaflet, the sole purpose of which is to direct the item to a particular person or address." The words added to s 30(1)(c) of the Act by the 1994 amendment were the words emphasised in the quotation from the Speech of Senator Bourne referred to above. The intention of the Parliament in adopting these extra words was to clarify inter alia that a "leaflet" was not part of the reserved services "whether or not a leaflet was directed to a particular person or address and whether or not (it was) enclosed in any sort of cover". In other words, for the purposes of the Act, a leaflet did not cease to be a leaflet simply because it was directed to a particular person or just because it was enclosed in a cover such as an envelope. It was not the intention of Parliament to narrow the reserved services by making an item a leaflet for the purposes of s 30(1)(c) of the Act if the document was directed to a particular person or address or was enclosed in an envelope. DID THE FOXTEL ITEM INCLUDE A LETTER? In my view the single sheet of paper to which the discount voucher was attached is a letter. It is a form of written communication that is directed to a particular address and includes an envelope containing such communication. The fact that an advertising brochure was also included in the envelope is irrelevant. The fact is that a letter was delivered by Streetfile. WAS THE FOXTEL LETTER A LETTER RELATING TO GOODS THAT IS SENT WITH THE GOODS? The brochure did not constitute "goods". It is advertising material that promotes the sale of goods. The notion of a "letter relating to goods that is sent and delivered with the goods" as referred to in s 30(1)(b) of the Act comprehends letters which accompany actual goods and not brochures promoting such goods. IS THE LETTER ALSO CAPABLE OF BEING DESCRIBED AS A LEAFLET FOR THE PURPOSES OF THE ACT? In my view the intention of s 30(1)(c) of the Act is to make a distinction between letters and leaflets. As the then responsible Minister said in 1994 "generic or pro-forma letters" containing "identical text" remain within the reserved services but the inclusion of material in the name of an address slip with a leaflet does not make the delivery of such an item within the reserved services. Leaflets are usually mass-produced promotional documents which are not, on their face, directed to any particular person or address. Such items are not within the reserved services simply if an address sheet is inserted with the leaflet. The Foxtel letter, however, is not a leaflet. On the face of the letter itself the intended recipient is identified. In my view, in delivering the Foxtel item Streetfile contravened s 29 of the Act. DID THE UNIVERSITY ITEM INCLUDE A LETTER? For the same reasons which underpin my view regarding the Foxtel item, I consider that the "Dear Applicant" document within the University item is a letter. It is a form of written communication. The communication is directed to a particular person at a particular address having regard to the envelope which enclosed it being so marked. The definition of "letter" in s 4 of the Act merges the communication with the envelope for the purposes of that definition. The fact that the application form for a partial "HECS Scholarship" was included in the envelope is irrelevant, just as the inclusion of the brochure with the Foxtel item was irrelevant. IS THE UNIVERSITY ITEM "A LEAFLET"? For the same reasons which I referred to in holding that the Foxtel letter was not a leaflet, I believe that the "Dear Applicant" letter in the University item is also not a leaflet. REMEDY - DECLARATION Having regard to the Court's findings that Streetfile has contravened the Act in delivering the Foxtel and University items, the Court will make appropriate declarations reflecting these findings. SHOULD THE COURT GRANT AN INJUNCTION? Mr Derham submitted that the Court should grant an injunction directed to Streetfile to restrain it from delivering any letter in the form of the Foxtel and University letters or any letter in similar form. He contended, inter alia, that it was important for the Court to do so in order to: · ensure compliance with the Act; · indicate the Court disapproval of Streetfile's conduct; and · deter Streetfile from repeating the infringements. Ms Symon submitted that Streetfile was mindful of its obligations under the Act. She contended that the relevant breaches of the Act were not deliberate or flagrant and it was unlikely that Streetfile would infringe against the Act in the future. Ms Symon referred to proceedings before Northrop J in July 1996 which led to his Honour's judgment in Australian Postal Corporation v Streetfile Pty Ltd, (Northrop J, 6 November 1996, unreported). In that proceeding Streetfile admitted contraventions of the Act. After the hearing before Northrop J, but before his Honour delivered judgment, Streetfile commenced to adopt a quality assurance system to prevent further contraventions of the Act. As at July 1996 no such processes had been adopted. This led Northrop J to say that: "The evidence discloses that Streetfile has not adopted any processes whereby a decision can be made by a responsible officer of Streetfile whether any proposed activity by Streetfile would, or would be likely to, constitute an infringement of the reserved services. No informed decision on this question was made by any responsible person in the present case. Coupled with this is the fact that it is difficult for Australia Post to detect infringements." For reasons peculiar to the manner in which the case before him was conducted, Northrop J did not grant an injunction. In the circumstances before me, I also believe that an injunction is not appropriate, notwithstanding that it is often difficult for Australia Post to detect breaches of the Act. My reasons for that view are as follows: · It is not until one examines the Senate Debates referred to in these reasons that s 30(1)(c) of the Act is capable of being properly understood. On the face of s 30(1)(c) there is room for confusion and genuine differences of opinion as to its meaning. Indeed, Northrop J, in the matter before him, observed in reference to s 30(1)(c), that "its wording is obscure". Therefore, whilst the breach of the Act is not to be excused lightly, the breach must be viewed against a lack of legislative clarity. In light of these reasons for judgment, Streetfile now has a further, hopefully, clearer, yardstick by which to examine its future conduct. · Streetfile has made substantial progress towards the establishment of an appropriate and effective quality assurance system. The contraventions the subject of this proceeding occurred when that system was in its infancy. The quality assurance system was then only in its "developmental stage". The Court received evidence, both oral and documentary, from Streetfile which reveals that: · Streetfile's quality assurance procedures are under constant review and consideration and are implemented in staff training programs. · Streetfile is committed to the success of its quality assurance process and has two staff dedicated to the implementation of the process. · The Customer Services Manager of Streetfile, Mr Fisher, examines most items for delivery and all items in respect of which there is a doubt as to whether delivery of the item would infringe the Act. If in doubt he refers the relevant items to Streetfile's solicitors, Dunhill Madden Butler, a reputable firm of solicitors with staff experienced in interpreting the Act. ORDER Consequently, the Court considers it appropriate merely to make a declaratory order and otherwise dismiss the application. There will be no order as to costs. The order of the Court is as follows: 1. It is declared that by delivering the items referred to in the particulars to paragraph 6 of the Applicant's amended statement of claim the respondent contravened s 29 of the Australian Postal Corporation Act 1989. 2. The application otherwise be dismissed. I certify that this and the preceding ten (10) pages are a true copy of the Reasons for Judgment herein of the Honourable Justice Marshall