FEDERAL COURT OF AUSTRALIA Bride v The Shire of Katanning [2016] FCA 65 File number: WAD 426 of 2015 Judge: MCKERRACHER J Date of judgment: 10 February 2016 Catchwords: CONSUMER LAW – whether asserted conduct of local government authority was conduct 'in trade or commerce' – conduct of local government authority in the pursuit of rates – conduct of local government authority in the course of litigation CONSUMER LAW – jurisdiction of Federal Court of Australia under the Australian Consumer Law – whether jurisdiction of Australian Consumer Law extends to partnership – whether firm of solicitors acting in trade and commerce – whether jurisdiction of Federal Court of Australia to consider tort of conspiracy attracted by assertion of non-colourable federal claims – whether federal nexus in assertion of misleading and deceptive conduct or unconscionable conduct – whether extended operation of Competition and Consumer Act 2010 (Cth) Legislation: Competition and Consumer Act 2010 (Cth), ss 44C, 131, 138 Sch 2, Australian Consumer Law, ss 18, 20, 21 Federal Court of Australia Act 1976 (Cth) ss 19, 31A Federal Court Rules 2011 (Cth) rr 13.01(1)(a), 16.21(1) Local Government Act 1995 (WA) ss 1.4, 6.55 Cases cited: Bhagat v Royal & Sun Alliance Life Assurance Australia Ltd [2000] NSWSC 159 Bhagat v Global Custodians Ltd [2002] FCAFC 51 Bride v Australian Bank Ltd [2000] WASC 116 Bride v Shire of Katanning [2003] WADC 92 Bride v Shire of Katanning [2007] WADC 116 Bride v Shire of Katanning [2008] WASC 131 Bride v Shire of Katanning [2013] WASCA 154 Bride v Shire of Katanning [2015] WASCA 77 Bride v The Australian Bank Ltd [2000] WASC 310 Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v Queensland Rail [2015] HCA 11 Concrete Constructions (NSW) Pty Ltd v Nelson (1990) 169 CLR 594 Fletcher v Nextra Australia Pty Ltd (2015) 229 FCR 153 Hearn v O'Rourke (2003) 129 FCR 64 Markit Pty Ltd v Commissioner of Taxation (Cth) (2007) 1 Qd R 253 Nyoni v Shire of Kellerberrin (No 6) [2015] FCA 1294 Ogawa v The University of Melbourne (No 2) [2004] FCA 1275 Shire of Katanning v Bride [2011] WASC 80 Shire of Katanning v Bride (No 2) [2011] WASC 248 Shire of Katanning v Bride (No 4) [2014] WASC 343 Truong Giang Corporation v Quach [2016] FCA 50 Date of hearing: 8 October 2015 Date of last submissions: 18 October 2015 Registry: Western Australia Division: General Division National Practice Area: Commercial and Corporations Sub-area: Regulator and Consumer Protection Category: Catchwords Number of paragraphs: 49 Counsel for the Applicant: The Applicant appeared in person Counsel for the First Respondent: Mr PG McGowan Solicitor for the First Respondent: DLA Piper Australia Counsel for the Second Respondent: Ms KR Lendich Solicitor for the Second Respondent: Denman Popperwell Lawyers ORDERS WAD 426 of 2015 BETWEEN: EDWARD JAMES BRIDE Applicant AND: THE SHIRE OF KATANNING First Respondent MCLEODS Second Respondent JUDGE: MCKERRACHER J DATE OF ORDER: 10 FEBRUARY 2016 1. The application be dismissed. 2. The applicant pay the costs of the respondents, to be taxed if not agreed, including any reserved costs. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. REASONS FOR JUDGMENT MCKERRACHER J: APPLICATIONS TO DISMISS 1 Each of the Shire of Katanning and McLeods, a firm of solicitors apply, in effect, for judgment against Mr Bride, the applicant. 2 The Shire's application is for dismissal of the proceedings pursuant to s 31A of the Federal Court of Australia Act 1976 (Cth) (FCA), or alternatively, that the entirety of the statement of claim be struck out pursuant to r 16.21(1) of the Federal Court Rules 2011 (Cth) (FCR). It also applies for a costs order that: The Applicant pay the First Respondent's costs of the proceedings including all reserved costs, and this interlocutory application, on an indemnity basis, to be fixed and paid forthwith. 3 The application by McLeods is for the setting aside of the originating application pursuant to r 13.01(1)(a) FCR and for costs of the application and the proceeding, including reserved costs. 4 For reasons which follow, the applications pursued by each of the respondents should succeed. Costs, including reserved costs, if any, will follow the event. THE NATURE OF THE PROCEEDING 5 Mr Bride instituted this proceeding against the Shire and McLeods on 12 August 2015 alleging loss and damage arising out of circumstances in respect of which there has been a plethora of previous litigation, mainly in state courts. Mr Bride alleges that he suffered loss and damage due to contraventions by the Shire and McLeods of ss 18, 20 and 21 of the Australian Consumer Law (ACL) contained in Sch 2 to the Competition and Consumer Act 2010 (Cth) (CCA) in relation to conduct in certain litigation, specifically: (a) the consent orders filed in the Supreme Court of Western Australia in appeal number 73 of 2008, dated 19 September 2008, which resolve the question of mortgagee in possession by the Commonwealth Bank of Australia regarding Lot 29 Creek Street, Katanning, Western Australia; (b) the consent orders constituted an estoppel between the parties regarding the question of mortgagee in possession; (c) the Shire and McLeods contravened the ACL and unconsciously took advantage of Mr Bride's position of being legally untrained and unrepresented; and (d) the consent orders finalised all matters outstanding between the parties, save for the quantum of damages that Mr Bride had claimed against the Shire in the Magistrates Court (Action 19525 of 2004). 6 Mr Bride claims damages against the Shire of $2.8 million under s 237 of the ACL, aggravated damages, damages for unconscionable misrepresentation, special damages and interest. 7 The facts on which Mr Bride relies in his statement of claim can be summarised as follows: (a) Mr and Mrs Bride were the registered owners of Lot 29 as trustees of the Pinwernying Family Trust. Lot 29 is within the Shire and was at all material times subject to a mortgage (number C337514) in favour of the Australian Bank (which was subsequently subsumed by the Bank). (b) On 9 August 1984, the Australian Bank appointed Mr David Young and Mr John Anderson as 'receiver managers' to Lot 29. On the following day, Mr and Mrs Bride were evicted. They were declared bankrupt on 6 September 1984. In about January 1987, Mr Young and Mr Anderson retired as receiver managers and Mr Young and Mr Charles Fear were appointed by the Australian Bank as 'agents for the bank as mortgagee in possession of Lot 29, for the purpose of selling that property'. (c) The notice of appointment of Mr Young and Mr Fear was contained in a letter from Mr Fear to a representative of the Australian Bank dated 19 December 1988. The notice was not served on Mr or Mrs Bride at any time. 8 While the Shire may ultimately take issue with some of the statements above, should the matter proceed, it nevertheless accepts them for the purpose of the hearing of this application. 9 Over and above those facts, the Shire points to the fact that Lot 29 was repossessed by Mr Bride in about 2005. 10 As indicated, events the subject of this application have been the subject of litigation since 1984. This includes challenges to: (a) the validity of Mr Bride's bankruptcy in 1984; (b) the validity of the Mortgage (and various other mortgages) and Australian Bank's subsequent receivership; and (c) the conduct of Mr Bride's receivers and trustee in bankruptcy. 11 I am informed by the Shire that Mr Bride has commenced more than 60 applications in State and Federal courts, in support of which a schedule of a dozen decisions in the West Australian District Court, Supreme Court of Western Australia and the Court of Appeal of the Supreme Court of Western Australia have been produced. From a perusal of those decisions it is quite clear that the underlying substratum of facts giving rise to this application has been engaged and re-engaged on many occasions. Mortgagee in possession 12 In the course of his statement of claim and in his oral submissions Mr Bride refers to an issue regarding a 'mortgagee in possession'. This issue is directed to the question of whether or not the Australian Bank was actually in possession of Lot 29 at any stage between 1984 to 2005, which goes to the question of liability, if any, on the part of Mr Bride to pay rates to the Shire. 13 This question is relevant because Pt 6, Div 6 of the Local Government Act 1995 (WA) stipulates that the owner of land is responsible for the payment of rates. 'Owner' is defined in s 1.4 of the Local Government Act as being, relevantly, a person who is in possession as the holder of an estate of freehold in possession in the land or a mortgagee of the land, or where there is no person in possession, the person who is entitled to possession of the land in any of those capacities aforementioned except that of mortgagee. The effect of s 6.55 of the Local Government Act is that, if a person becomes the 'owner' of land, adopting the same definition, such a person is required to pay all the outstanding rates regardless of who was in possession previously. 14 My attention has been drawn to a number of judicial findings on the question of whether the Australian Bank was the 'mortgagee in possession' of Lot 29 between 1984 and 2005. In particular, reference was made by the Shire to the following: (a) In Bride v Australian Bank Ltd [2000] WASC 116 (at [141]) Parker J held that there was insufficient evidence to conclude that the Australian Bank took possession of Lot 29 in 1984 (and, therefore, did not reach a finding that the Australian Bank was the mortgagee in possession). (b) In Bride v The Australian Bank Ltd [2000] WASC 310, Acting Master Chapman struck out Mr Bride's statement of claim, which alleged, amongst other things, that the Australian Bank was the mortgagee in possession, on the basis that the issue which he was seeking to agitate had already been determined in previous proceedings. (c) In Bride v Shire of Katanning [2003] WADC 92, Registrar Kingsley held that the allegation that the Australian Bank was the mortgagee in possession of Lot 29 had been determined by Parker J in [2000] WASC 116 and Acting Master Chapman in [2000] WASC 310, and that the application was a collateral attack on both decisions. The Shire's claim for rates 15 My attention has also been drawn to a significant body of litigation in which Mr Bride has already pursued the question of the allegedly wrongful claim for rates by the Shire. Specifically: (a) in 2002, the Shire commenced proceedings against Mr Bride in the Magistrates Court of Western Australia for outstanding rates and charges in respect of Lot 29 between 1985 and 2004. Mr Bride's defence included a claim that the Australian Bank was the mortgagee in possession of Lot 29 at the relevant time and was therefore liable for the rates. On application of the Shire, Mr Bride's defence was struck out on the basis that the mortgagee in possession point had been previously decided in: (i) [2000] WASC 116; (ii) [2000] WASC 310; and (iii) [2003] WADC 92; (b) Mr Bride appealed to District Court and was unsuccessful: Bride v Shire of Katanning [2007] WADC 116 per O'Brien DCJ; (c) Mr Bride applied to the Supreme Court for an extension of time within which to appeal the District Court decision. Martin CJ granted leave to appeal: Bride v Shire of Katanning [2008] WASC 131; (d) following the grant of leave, Mr Bride and the Shire signed consent orders, setting aside the orders of O'Brien DCJ and the decision of the Magistrate and remitting the matter back to the Magistrates Court for rehearing. These are the consent orders which Mr Bride refers to in his statement of claim; (e) Mr Bride then filed a counterclaim in that remitted matter for $2.4 million, taking it out of the jurisdiction of the Magistrates Court. Proceedings were transferred to the Supreme Court of Western Australia and became CIV 2994/2009; (f) CIV 2994/2009 sought the payment of rates from 1985 to 2004 (as before). The Shire later commenced proceedings in CIV 2853/2010 which extended the period for which rates were owed, claiming rates up to the date of judgment (significantly, after Mr Bride re-took possession of Lot 29 in 2005). CIV 2853/2010 also included a claim pursuant to s 6.55 of the Local Government Act. These actions were dealt with together; (g) an application by the Shire in CIV 2853/2010 for summary judgment and strike-out of the defence and counterclaim of Mr Bride was dismissed by Martin CJ, who held that there were contentious issues of fact and law that should be determined at trial: Shire of Katanning v Bride [2011] WASC 80; (h) the substantive hearing of the Shire's applications in CIV 2994/2009 and CIV 2853/20l0 was heard by Allanson J. Mr Bride's $2.4 million counter-claim was reserved for determination after the substantive hearing. Allanson J held that the Australian Bank was never in 'actual possession' of Lot 29, as required by the Local Government Act. His Honour held that at all times Mr Bride was the registered proprietor, and, if the Bank were not in possession, he had the right of possession, and thus was the 'owner' under the Local Government Act: Shire of Katanning v Bride [No 2] [2011] WASC 248; (i) Mr Bride appealed to the Court of Appeal, which found, for the first time, that the Bank was a mortgagee in possession of Lot 29, at least from 1989: Bride v Shire of Katanning [2013] WASCA 154 per Newnes JA, Murphy JA and Edelman J. Their Honours however concluded that, as Mr Bride had re-taken possession of Lot 29, he was still liable for the outstanding rates (pursuant to s 6.55); (j) Mr Bride applied for special leave to appeal to the High Court, and was unsuccessful; (k) after the primary application had been decided, the counter-claim needed to be resolved. Mr Bride successfully applied for Allanson J to recuse himself: [2011] WASC 248; (l) the cross-claim was later dismissed by Chaney J: Shire of Katanning v Bride (No 4) [2014] WASC 343; and (m) an appeal to the Court of Appeal was dismissed as having no reasonable prospect of success: Bride v Shire of Katanning [2015] WASCA 77 per Newnes and Murphy JJA. 16 The pleading by Mr Bride in this proceeding, in raising the same matters again, potentially constitutes an abuse of process. But that point has not yet been taken by the respondents, and, on the basis of the reasoning which follows, does not need to be determined. 17 The pleading also contains allegations of improper conduct by the Shire. These allegations have also already been dismissed both in the Supreme Court of Western Australia in [2014] WASC 343 (at [37]-[38] and [43]) and the Court of Appeal of the Supreme Court of Western Australia in [2015] WASCA 77 (at [20]-[25] and [31]-[36]). 18 The re-agitation of those claims is also potentially an abuse of process, but this point is not yet advanced by the respondents and, similarly, does not need to be determined. STATUTORY CONSIDERATIONS 19 Section 31A of the FCA relevantly provides as follows: 31A Summary judgment … (2) The Court may give judgment for one party against another in relation to the whole or any part of a proceeding if: (a) the first party is defending the proceeding or that part of the proceeding; and (b) the Court is satisfied that the other party has no reasonable prospect of successfully prosecuting the proceeding or that part of the proceeding. (3) For the purposes of this section, a defence or a proceeding or part of a proceeding need not be: (a) hopeless; or (b) bound to fail; for it to have no reasonable prospect of success. … 20 Sections 18, 20 and 21 of the ACL provide as follows: 18 Misleading or deceptive conduct (1) A person must not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive. (2) Nothing in Part 3 1 (which is about unfair practices) limits by implication subsection (1). ... 20 Unconscionable conduct within the meaning of the unwritten law (1) A person must not, in trade or commerce, engage in conduct that is unconscionable, within the meaning of the unwritten law from time to time. (2) This section does not apply to conduct that is prohibited by section 21. 21 Unconscionable conduct in connection with goods or services (1) A person must not, in trade or commerce, in connection with: (a) the supply or possible supply of goods or services to a person (other than a listed public company); or (b) the acquisition or possible acquisition of goods or services from a person (other than a listed public company); engage in conduct that is, in all the circumstances, unconscionable. (2) This section does not apply to conduct that is engaged in only because the person engaging in the conduct: (a) institutes legal proceedings in relation to the supply or possible supply, or in relation to the acquisition or possible acquisition; or (b) refers to arbitration a dispute or claim in relation to the supply or possible supply, or in relation to the acquisition or possible acquisition. (3) For the purpose of determining whether a person has contravened subsection (1): (a) the court must not have regard to any circumstances that were not reasonably foreseeable at the time of the alleged contravention; and (b) the court may have regard to conduct engaged in, or circumstances existing, before the commencement of this section. (4) It is the intention of the Parliament that: (a) this section is not limited by the unwritten law relating to unconscionable conduct; and (b) this section is capable of applying to a system of conduct or pattern of behaviour, whether or not a particular individual is identified as having been disadvantaged by the conduct or behaviour; and (c) in considering whether conduct to which a contract relates is unconscionable, a court's consideration of the contract may include consideration of: (i) the terms of the contract; and (ii) the manner in which and the extent to which the contract is carried out; and is not limited to consideration of the circumstances relating to formation of the contract. Trade and commerce 21 There are two potentially relevant versions of the ACL on which Mr Bride may purport to rely. He has not, in his pleading at least, identified which. The Australian Consumer Law (WA) Sch 2 to the Fair Trading Act 2010 (WA) is one possibility. If so, this Court has no jurisdiction to hear an application based on that legislation, which is made exclusively pursuant to laws enacted by the Parliament of Western Australia. Orally, Mr Bride made clear he was not relying on this legislation. Mr Bride stressed that, although he had not specified it in the pleading, he was relying only upon the CCA provisions, not the Fair Trading Act provisions. 22 Mr Bride made clear that reliance is placed upon the ACL, which is Sch 2 of the CCA. The question which follows is whether any of the conduct asserted against the Shire was conduct 'in trade or commerce'. It is essential that the conduct, the subject of complaint, referred to in those provisions be conduct 'in trade or commerce'. Section 2 of the ACL effectively defines 'trade and commerce' as being trade or commerce within Australia or trade and commerce between Australia and places outside of Australia, including any business or professional activity (whether or not carried on for profit). This is a well-travelled area of the law. It was reviewed in some detail by the Full Court last year in Fletcher v Nextra Australia Pty Ltd (2015) 229 FCR 153 per Middleton, McKerracher and Davies JJ. In particular, the Full Court set out the observations of the High Court in Concrete Constructions (NSW) Pty Ltd v Nelson (1990) 169 CLR 594 (at [30]) and said (at [31]): It has been observed that the High Court made a deliberate choice in Concrete Constructions between a wide and narrow view of the expression "in trade or commerce" in s 52 and chose the narrow view: see Robin Pty Ltd v Canberra International Airport Pty Ltd (1999) 179 ALR 449 per Gyles J at [44]. As such "in trade or commerce" would have a restrictive operation and confine the effect of the provision to conduct which "is itself an aspect or element of activities or transactions which, of their nature, bear a trading or a commercial character": Concrete Constructions at 603. In Concrete Constructions, focus was placed upon "the central conception" of trade or commerce and not the "immense field of activities" in which corporations may engage in the course of, or for the purposes of, carrying on some overall trading or commercial business. As Yates J noted in Toben v Jones (2012) 298 ALR 203 at [40] and the authorities there cited, conduct "in relation to" or "in connection with" trade or commerce is not sufficient to engage the provision. 23 Concrete Constructions made clear that s 52 (the predecessor of s 18) was not intended to extend to all conduct, regardless of its nature, in which a corporation might engage for the purpose of its overall trading or commercial business. Rather, the reference to conduct 'in trade or commerce' can be construed as referring only to conduct which is itself an aspect or element of activities or transactions which of their nature bear a trading or commercial character. 24 This point was also noted by the Full Court in Nextra and in Hearn v O'Rourke (2003) 129 FCR 64, where Dowsett J said (at [29]): … [T]he focus must be upon the conduct in question and not upon the range of activities in which a relevant corporation may be engaged. In other words, one does not simply identify the conduct in question, note that the relevant corporation is engaged in commercial activity of some kind, then look for a connection between the two. Because corporations are usually formed to engage in commercial activities, it will rarely be difficult to find such a connection. The correct approach is to determine whether or not the relevant conduct can, according to ordinary usage, be described as having occurred in the course of dealings "which, of their nature, bear a trading or commercial character". The commercial undertakings of the corporation in question may be relevant to the exercise. However, the more important question will be whether the conduct is of a kind which is usually of a commercial nature. 25 As noted by Siopis J in Nyoni v Shire of Kellerberrin (No 6) [2015] FCA 1294 (at [383]-[386] and [388]): 383 The question of whether conduct was "in trade or commerce" was considered by the High Court in Concrete Constructions (NSW) Pty Limited v Nelson (1990) 169 CLR 594. In that case, it was pleaded that a foreman employed by a corporation had made a statement to another employee of the corporation about safety aspects of an air-conditioning grate on which the second employee was working, that the statement was untrue and that as a consequence of relying on the statement, the second employee had been injured and suffered loss and damage. It was contended that those circumstances gave rise to a contravention of s 52 of the Trade Practices Act. The High Court had to determine whether a statement made in those circumstances could comprise conduct "in trade or commerce" for the purpose of determining whether the prohibition in s 52 of the Trade Practices Act applied to that conduct. 384 The High Court drew a distinction between conduct "in trade or commerce" and conduct "in connection with" or "in relation to" trade or commerce. The distinction was succinctly expressed by Toohey J at 614: Even taking such a broad view of s 52(1), the preposition "in" clearly operates by way of limitation. The question is not whether the conduct engaged in was in connexion with trade or commerce or in relation to trade or commerce. It must have been in trade or commerce. (Original emphasis.) 385 In my view, this distinction is one which applies in relation to the conduct of the Shire in producing and publishing the minutes of the meeting of 16 February 2010. 386 In this regard, a distinction must be drawn between the activity of the Shire in entering into a contract to purchase 96 Massingham Street and in entering into an arrangement with Mr Reid or Ms Ashburn for the lease of 96 Massingham Street to Ms Ashburn, on the one hand, and the publication of minutes of the Council meeting which relate to those two transactions, on the other hand. … 388 In producing and publishing the minutes of the meeting of 16 February 2010, however, the Council was fulfilling a statutory obligation and not engaging in conduct "in trade or commerce". However, insofar as that conduct was to be characterised by reference to the distinction between "in trade or commerce" or "in relation to trade or commerce" the conduct would be, in my view, in any event, fall within the ambit of conduct "in relation to trade or commerce". This is because the conduct in producing and publishing the minutes comprised no more than recording and advising the public of the Shire's activities which comprised conduct "in trade or commerce", namely, the purchase and proposed lease of 96 Massingham Street. 26 There is nothing in the pleaded case which has any element of commerciality in the sense demanded by the expression 'trade and commerce'. All of the allegations are either allegations concerning the Shire's conduct in litigation or allegations concerning the Shire's conduct in the pursuit of Mr Bride for rates. 27 Pursuit of rates by a shire is part of its legislatively prescribed charter. It is not commercial conduct. In Markit Pty Ltd v Commissioner of Taxation (Cth) (2007) 1 Qd R 253, Muir J made clear that the conduct of the Commissioner of Taxation in attempting to collect taxes was not conduct in trade or commerce, rather, the Commissioner was acting pursuant to his statutory obligations and, in doing so, performing functions which were quintessentially governmental. His Honour noted (at [38]) that the activities of the Commissioner were governmental in nature and even the resort to the sorts of actions a commercial enterprise might take to recover a debt would not cause the conduct of the Commissioner to 'bear a trading or commercial character'. His Honour held that the Commissioner's conduct must be considered in the light of his statutory function and undertaking. 28 Similarly, in the present circumstances, the Shire had the power pursuant to the Local Government Act to raise revenue by imposition of rates, something which occurs without trade or negotiation with land owners. 29 In the hearing before me Mr Bride submitted that there were numerous activities of the Shire which were clearly in commerce. He listed some of the activities. 30 No dispute arises as to the fact that the Shire is involved in trading activities. The real question, however, is whether the conduct that is the subject of complaint was in trade or commerce. For reasons I have stressed, clearly it was not so. 31 Moreover, carrying on litigation is certainly not conduct 'in trade or commerce', regardless of whether the asserted participant in trade and commerce is the protagonist or the recipient of the protagonist's activities in litigation. Steps taken and conduct engaged in litigation, again, are governed by statutes and rules prescribing the nature of the conduct which may or must be engaged in, in the course of litigious activity. There are ample statutory and discretionary avenues by which the conduct of parties in litigation is addressed. None of these avenues operates on the premise that the conduct is commercial in character. 32 That is well illustrated when examining the following conduct pleaded by Mr Bride in the statement of claim: the Shire since 1994 'deliberately and knowingly pretended that the [Bank] was not acting as a "mortgagee in possession" of [Lot 29]'; the Shire engaged in unconscionable conduct by taking 'unconscionable advantage of the weak and vulnerable position of [Mr Bride] resulting from the financial position and legal pressure he was under and the associate pressure caused by the litigation'; the Shire by 'vigorously and unconscionably' opposing attempts to have a Notice of Appointment 'handed up' have 'unnecessarily delayed and prolonged a truthful hearing and determination of the action and the matters of the mortgagee in possession'; the Shire, represented by McLeods, commenced an action in the Magistrates Court and obtained judgment 'on the knowingly false basis of res judicata and estoppel'; the consent orders signed on 18 September 2008 were an agreement between the parties that the Bank was mortgagee in possession of Lot 29 at the relevant time and the Shire's conduct in continuing to assert that the Australian Bank was not the mortgagee in possession was unconscionable; McLeods took unconscionable and unfair advantage of Mr Bride's lack of legal knowledge; the conduct of solicitors of McLeods at a particular hearing was unconscionable and misleading; it was not reasonable for the Shire to assert from 1994 onwards (following receipt of a letter from Mr Bride), that the Australian Bank was not a 'mortgagee in possession' of Lot 29; McLeods and the Shire have 'knowingly conspired to cause Mr Bride to suffer loss and damage by knowingly, dishonestly and unconscionably maintaining that the Bank was not the 'mortgagee in possession' of Lot 29; the Shire's conduct in [2003] WADC 92 was 'deliberately misleading and untenable'; the Shire's conduct in the Magistrates Court Action 19525 of 2004 was misleading, in that it relied on the District Court decision which was 'improperly procured'; and the Shire falsely and unconscionably pursued Mr Bride for rates and charges when they knew the Bank was in possession of Lot 29 at the time. 33 I accept the submission for the Shire that these issues are not mere technical pleading failures, but fundamental flaws in Mr Bride's entire claim. None of the conduct asserted is in trade or commerce. Accordingly, the claim against the Shire will be summarily dismissed with costs. 34 The Shire also pursues a striking out claim in respect of the statement of claim. However, it is unnecessary to consider the submissions in respect of this aspect of the Shire's application in light of the conclusion expressed above. APPLICATION BY MCLEODS Jurisdiction 35 Section 131 of the CCA provides: 131 Application of the Australian Consumer Law in relation to corporations etc. (1) Schedule 2 applies as a law of the Commonwealth to the conduct of corporations, and in relation to contraventions of Chapter 2, 3 or 4 of Schedule 2 by corporations. 2) Without limiting subsection (1): (a) section 21 of Schedule 2 also applies as a law of the Commonwealth in relation to: (i) a supply or possible supply of goods or services by any person to a corporation (other than a listed public company); or (ii) an acquisition or possible acquisition of goods or services from any person by a corporation (other than a listed public company); and (b) section 147 of Schedule 2 also applies as a law of the Commonwealth to, and in relation to, a corporation as a supplier referred to in that section; and (c) Division 2 of Part 5 1 of Schedule 2 also applies as a law of the Commonwealth to and in relation to a person if the other person referred to in section 219 of Schedule 2 is a corporation. (3) The table of contents in Schedule 2 is additional information that is not part of this Act. Information in the table may be added to or edited in any published version of this Act. 36 The original jurisdiction of the Federal Court of Australia is statutory. It is generally limited to those matters which federal Parliament specifically identifies: see s 19 of the FCA. The Court has jurisdiction to deal with allegations arising under ss 18, 20 and 21 of the ACL by virtue of s 138(1) of the CCA. In turn, the Commonwealth power to legislate in this area is derived from s 51(xx) of the Constitution of Australia. Section 131(1) of the CCA applies to the ACL as a law of the Commonwealth to the activities of corporations. Subsection (2) expressly provides that s 21 of the ACL applies to corporations, being a collection of individuals practising law. 37 McLeods is a partnership. A partnership is a relationship, not a separate legal entity like a corporation. Each partner jointly owns all the business assets and liabilities. The Partnership Act 1895 (WA) defines a 'partnership' as: Part I - Nature of partnership 7. Meaning of "partnership" (1) Partnership is the relation which subsists between persons carrying on a business in common with a view of profit. (2) In deciding whether a partnership does or does not exist in any particular case, the court shall have regard to the true contract and intention of the partners as appearing from the whole facts of the case. (emphasis added) 38 It suffices to observe that a partnership is not incorporated. It is the relationship created by lawfully authorised agreement between individual people. Being unincorporated, it does not have the same limitations on liability that shareholders in a corporation enjoy. It accounts differently and is managed differently from a corporation. The assets are owned by a different mechanism. 39 The only basis on which the ACL could apply to McLeods is by virtue of the extended operation of the CCA pursuant to s 6. However, in each instance of extended operation, there must also be the requisite link to Commonwealth constitutional power, such as international, interstate, intra-territory or supplies to the Commonwealth, usage of post or telegraphic or telephonic services: see s 6(2), 6(3) and 6(3A) of the CCA. 40 In the hearing before me Mr Bride stressed that a firm of solicitors is clearly acting in commerce, it has numerous commercial activities, it acts as a group, it operates under an Australian Business Number, it has GST obligations and other professional obligations and is not a collection of individuals, but a combination forming a particular partnership and operating under a business name. While he did not go quite so far as to stress that, therefore, a partnership was a corporation, he did submit that all these factors would 'give it a good shake at being a corporation'. That is not so as a matter of law. A partnership is quite a distinct creature from a corporation. The only exception to this would be where a partnership, to use the term loosely, comprised of two or more corporations, as, for example, that expression appears in s 44C of the CCA dealing with access to services. There is no such suggestion in this instance. 41 In an affidavit subsequently filed, Mr Bride submitted that the partnership McLeods should be regarded as a corporation by virtue of the judgment in Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v Queensland Rail [2015] HCA 11. That decision does not assist Mr Bride. It pertained to a government authority, not a partnership. 42 In the allegations advanced against McLeods, Mr Bride asserts that the Shire and McLeods engaged in conduct that was misleading or deceptive or was unconscionable. There was also an entirely un-particularised and vague assertion of conspiracy. There is no jurisdiction for this Court to consider the tort of conspiracy unless it is part of the Court's jurisdiction attracted by virtue of the assertion of other non-colourable federal claims. As indicated above, however, the pleaded case, essentially, is that in September 2008, in the course of a court appointment, Mr Bride was informed of something by a partner of McLeods. It is alleged that what he was told was misleading or unconscionable. There is no federal nexus in this assertion. Further allegations are that: (a) various consent orders following a discussion in 2008 gave rise to an estoppel, but, despite that estoppel, McLeods unconscionably reargued a particular issue before the Court without informing the Court of the alleged effect of the consent order; (b) by reason of McLeods' possession of a particular letter, in 1996, 2002 and 2004 (all before the introduction of the CCA) it was misleading to run a particular argument before the Court; and (c) McLeods wrongfully relied on a court's reasoning despite the fact that it must have known that a fact in an affidavit sworn by a lawyer for a bank in that proceeding was wrong. 43 These claims against individuals would need to rely on the extended operation of the CCA. However, the pleaded conduct has no place as the conduct pleaded does not raise anything that can be linked to a federal or commonwealth constitutional power. The CCA does not purport, nor could it, to legislate against individuals engaging in intra-state trade or commerce, as pleaded. Such conduct is dealt with in the reciprocal legislation enacted by the various States, including Western Australia in the Fair Trading Act: see in contrast intra-territory conduct dealt with by s 6(4) of the CCA. 44 The other key difficulty with the jurisdictional basis of the claim advanced by Mr Bride is that, for the reasons expressed above, the conduct asserted in the statement of claim was not conduct in 'trade or commerce'. This aspect has already been addressed in the Shire's application. 45 The originating application will be 'set aside', which is the expression now used in the FCR. Moreover, it is quite apparent that there are no prospects of success of the claim against McLeods and it will also be dismissed at the Court's instance, pursuant to s 31A of the FCA. COSTS 46 In relation to costs, while it is clear that costs must follow the event, including any reserved costs, I have given consideration to the Shire's application for costs to be payable on an indemnity basis to be fixed and paid forthwith. As noted very recently by Wigney J in Truong Giang Corporation v Quach [2016] FCA 50 there is a broad discretion to order costs under s 43 of the FCA. Costs ordinarily follow the event on a party/party basis unless there are particular or special circumstances which would warrant the Court making a special costs order, including an order that costs be assessed on an indemnity basis. Wigney J referred (at [16]) to Bhagat v Royal & Sun Alliance Life Assurance Australia Ltd [2000] NSWSC 159, where Hodgson CJ in Eq observed (at [13]): … I accept that a court does have to make allowances for the position of litigants in person, and to try to ensure that such a litigant does not lose out because of lack of expertise; although there is a limit to what the Court can do in that regard, while still remaining an impartial determinant of a dispute. The Court may in those circumstances refrain from making orders against litigants in person for conduct that might be considered as justifying orders for costs against represented litigants. By the same token, litigants in person can cause great hardship and expense to other parties, through making allegations and claims that lawyers would recognise as allegations and claims that could not reasonably or even properly be made, and through making proceedings much longer and much more expensive than they otherwise would be, by not focusing accurately on the real issues in the case. Conduct of that nature by legally represented parties would often lead to orders for indemnity costs. Litigants in person may escape the consequence of indemnity costs, but I do not think that the circumstance that a party is a litigant in person is a ground for displacing the ordinary result that costs follow the event. And see Bhagat v Global Custodians Ltd [2002] FCAFC 51 (at [57]-[60]) and Ogawa v The University of Melbourne (No 2) [2004] FCA 1275 (at [41]-[48]). 47 I have seriously entertained the possibility of making an award of indemnity costs because a good portion of the content of the proposed claim was repetitious of previously rejected claims. In those circumstances, a litigant should not usually be out of pocket by being forced to meet and defend such claims. In the end though I have formed the view that there was, at least, apparently, in Mr Bride's perception of it all, a sufficiently new foundation for his claims despite the fact that the content within some of those claims was dependent on previously rejected claims. By a narrow margin, I think he falls just short of exposure to paying costs on an indemnity basis. Mr Bride should pay the costs of the respondents on a party/party basis to be taxed if not agreed, including any reserved costs. 48 It is important, however, that Mr Bride understand that unreasonable persistence in applications that are devoid of merit prolongs the matter and unnecessarily increases costs. Further, such conduct might place Mr Bride again in the position where an order for indemnity costs is made against him. 49 The following orders are made: 1. The application be dismissed. 2. The applicant pay the costs of the respondents, to be taxed if not agreed, including any reserved costs. I certify that the preceding forty-nine (49) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice McKerracher. Associate: Dated: 10 February 2016