Seilers Transport Pty Ltd v McGrath
[2016] QDC 75
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- Unreported Judgment
- Seilers Transport Pty Ltd v McGrath[2016] QDC 75
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Seilers Transport Pty Ltd v McGrath[2016] QDC 75
Seilers Transport Pty Ltd v McGrath[2016] QDC 75
DISTRICT COURT OF QUEENSLAND
CITATION: | Seilers Transport Pty Ltd v McGrath [2016] QDC 75 |
PARTIES: | SEILERS TRANSPORT PTY LTD (appellant) v DESMOND RODNEY McGRATH (respondent) |
FILE NO/S: | 2251/15 |
DIVISION: | Civil |
PROCEEDING: | Appeal |
ORIGINATING COURT: | Magistrates Court, Brisbane |
DELIVERED ON: | 8 April 2016 |
DELIVERED AT: | Brisbane |
HEARING DATE: | 30 March 2016 |
JUDGE: | Dorney QC DCJ |
ORDERS: |
|
CATCHWORDS: | Appeal – consumer protection legislation – inferential reasoning as to proof of supply “in trade or commerce” – costs under r 189(4) of the Uniform Civil Procedure Rules 1999 |
LEGISLATION CITED: | Competition and Consumer Act 2010 (Cth), Sch 2 Australian Consumer Law, s 259(3)(b), s 259(4) Magistrates Courts Act 1921, s 47(a), s 47(f) Uniform Civil Procedure Rules 1999 r 189(4), r 698 |
CASES CITED: | Bevanere Pty Ltd v Lubidineuse (1985) 7 FCR 325 Calderbank v Calderbank [1976] Fam 93 Chong & Neale v CC Containers Pty Ltd [2015] VSCA 137 Concrete Constructions (NSW) Pty Ltd v Nelson (1990) 169 CLR 594 Elite Protective Personnel Pty Ltd v Salmon [2007] NSWCA 322 Fletcher v Nextra Australia Pty Ltd (2015) 229 FCR 153 Goodhue v Volunteer Marine Rescue Association Incorporated [2015] QCA 234 Houghton v Arms (2006) 225 CLR 553 House v R (1936) 55 CLR 499 Jones v Dunkel (1959) 101 CLR 298 Lake Koala Pty Ltd v Walker [1991] 2 Qd R 49 Martin v Osborne (1936) 55 CLR 367 Michail v Australian Alliance Insurance Co Ltd [2013] QDC 284 Perisher Blue Pty Ltd v Nair-Smith (No 2) [2015] NSWCA 268 Roberts v Prendergast [2013] QCA 89 Sze Tu v Lowe (2014) 89 NSWLR 317 Warren v Coombes (1979) 142 CLR 531 Westpac Banking Corporation v Jamieson [2015] QCA 84 Williams v Pisano [2015] NSWCA 177 |
COUNSEL: | A F Messina for the Appellant A M Christie for the Respondent |
SOLICITORS: | Slade Waterhouse for the Appellant Aden Lawyers for the Respondent |
Introduction
- [1]This appeal revolves around the question whether a trailer (described in its advertisement as a “FREIGHTER STOCK CRATE 1996”) – in circumstances where a Freighter was a particular brand of trailer (which this was not) and where it was the subject of a “supply” to a “consumer” - occurred as a supply “in trade or commerce” of goods to a consumer.
- [2]It was conceded in oral argument by the respondent/defendant (the “supplier”) that the supply of the trailer was the supply of a “commercial” vehicle. Of course, that is simply one factor to be taken into account.
- [3]The learned Magistrate dismissed the appellant/plaintiff’s claim and made an order that the plaintiff pay the defendant’s costs of the proceeding on the standard basis. There was an argument as to costs as well – which will be dealt with last.
Relevant legislation
- [4]The appellant’s claim was for damages and, or alternatively, compensation pursuant to s 259(3)(b) and, or alternatively, s 259(4) of the Australian Consumer Law [which is contained in Schedule 2 of the Competition and Consumer Act 2010 (Cth)].
- [5]Since the primary argument in this appeal is the issue of “trade or commerce”, it should be noted that s 2 of the Australian Consumer Law (“ACL”) defines it to “mean”, relevantly, trade or commerce within Australia and to “include” any business or professional activity (whether or not carried on for profit).
- [6]Since I have concluded that the learned Magistrate was correct in his ultimate conclusion that the appellant (as plaintiff) did not discharge the onus of proof on it to prove that the supply was “in trade or commerce” – and where that was the only basis upon which the appellant based its claim – it is unnecessary to consider the damages and, or alternatively, compensation which might have been awarded otherwise, particularly where the learned Magistrate himself did not make any such findings.
Relevant authorities on “in trade or commerce”
- [7]Necessarily, one starts with Concrete Constructions (NSW) Pty Ltd v Nelson (1990) 169 CLR 594. It is unnecessary to go past the decision of the plurality, Mason CJ, Deane, Dawson and Gaudron JJ. After stressing that attention must be paid to the word “in”, the plurality held that the phrase “in trade or commerce” in s 52 [as it then was in the then Trade Practices Act 1975 (Cth)] “has a restrictive operation”: at 602. They held that it qualifies the prohibition against engaging in conduct of the specified kind; but noted that, as a matter of language, a prohibition against engaging in conduct “in trade or commerce” can be construed as encompassing conduct in the course of the myriad of activities which are not, of their nature, of a trading or commercial character but which are undertaken in the course of, or as incidental to, the carrying on of an overall trading or commercial business. That particular approach was rejected and the “alternative” approach (of reference “only to conduct which is itself an aspect or element of activities or transactions which, of their nature, bear a trading or commercial character”) was approved: at 602-603. It was, thus, held that the phrase referred to “the central conception” of trade or commerce and not to 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: at 603. As the plurality then held, put differently, the section was not intended to impose, by a side-wind, an overlay of Commonwealth law upon every field of legislative control into which a corporation might stray for the purposes of, or in connection with, carrying on its trading or commercial activities because what it is concerned with is the conduct of a corporation towards persons with whom it (or those whose interests it represents or is seeking to promote) has or may have dealings in the course of those activities or transactions which, of their nature, bear a trading or commercial character: at 604. See, also, Houghton v Arms (2006) 225 CLR 553 at 565 [33].
- [8]Very recently, the New South Wales Court of Appeal in Williams v Pisano [2015] NSWCA 177 was concerned with representations made on behalf of vendors to perspective purchasers of a residential property. Emmett JA, who spoke for the Court on this issue, noted that it is relevant to consider the character of the parties involved, which includes whether they are people who have engaged in, or are about to engage in, commercial activities, whether the transactions are motivated by business, as distinct from personal, reasons, and whether the person whose conduct is under attack played an active part in the transaction: at [38]. This was later emphasised by stating that it is the character of the act that is the subject of the complaint, so far as the person doing the act is concerned, that is critical: at [41]. Lastly, it was noted that the fact that a property is advertised prior to its sale (“whether the advertisements are published in the print media or on a website”) does not, of itself, mean that the conduct engaged in, in connection with the sale of that property, is conduct in trade or commerce: at [46].
- [9]Before turning to the only two cases brought to my attention which in any way vaguely deal with similar factual situations, it is noted that in Fletcher v Nextra Australia Pty Ltd (2015) 229 FCR 153 the Full Court of the Federal Court observed that the High Court made a deliberate choice in Concrete Constructions between a wide and a narrow view of the expression “in trade or commerce”, and “chose the narrow view”: at 165 [31]. As further noted in that paragraph, by reference to cited authority, conduct “in relation to” or “in connection with” trade or commerce “is not sufficient to engage the provision”.
- [10]The earliest of the somewhat factually similar cases is Bevanere Pty Ltd v Lubidineuse (1985) 7 FCR 325. The Full Court of the Federal Court held that the argument [that the sale there by a corporation of its only capital asset (in a case where the corporation was not engaged in the business of buying or selling such capital assets) did not constitute relevant conduct] needed to be considered in the context of the facts surrounding the sale of the business (which was a cosmetic clinic that provided general beauty services, with some special interest in scar problems): at 329. The Court held that the business was that of conducting the clinic, that the contract provided not only for the sale of goodwill of the business but also of stock, that the business was sold as a going concern, and that, in order to protect the goodwill, a covenant was given by the purchaser of non-competition kind: at 329. The Court held that the sale of the clinic should not be viewed in isolation from the totality of the commercial activities, with the sale being part of those activities (where the proceeds of sale were available to be used in other commercial activities, if the corporation so chose): also at 329. It was in that context that the Court held that the “mere fact that it was a sale of a capital asset did not deprive it of its character as a transaction in trade or commerce”: at 329-330. The Court concluded that, in their opinion, the making of the arrangements necessary to dispose of the clinic were part and parcel of the totality of the appellant’s activities in trade or commerce: at 331.
- [11]The second case was decided without reference to Concrete Constructions. Nevertheless, neither it nor Bevanere was contended to be distinguishable on the basis of the High Court’s preferred “narrow view”. Connolly J in Lake Koala Pty Ltd v Walker [1991] 2 Qd R 49 – a decision which makes no reference to Concrete Constructions although the date of the decision would appear to be later than that given by the High Court – held that, where the defendants had been “engaged for some time in the business of renting out their land and deriving a substantial consideration from the sale of the assets of the business conducted upon it”, he was “prepared to assume that the conduct complained of by the plaintiff in (the) action was in trade or commerce”, citing Bevanere: at 56-57. In particular, in reference to that Full Court decision, he noted that it had referred to an earlier Federal Court decision and stated that nothing that was said in that case lent support to the proposition that the sale of a capital item used for business purposes will not constitute conduct in trade or commerce unless it forms part of a business of buying or selling such capital assets: at 57.
Approach of court on appeal
- [12]Given that neither party to the appeal contended that there were significant disputed facts in the brief evidence given before the learned Magistrate, it is appropriate to adopt the approach in Warren v Coombes (1979) 142 CLR 531. There, the plurality held that, shortly expressed, the established principles are “that in general an appellate court is in as good a position as the trial judge to decide on the proper inference to be drawn from facts which are undisputed or which, having been disputed, are established by the findings of the trial judge” and that, in “deciding what is the proper inference to be drawn, the appellate court will give respect and weight to the conclusions of the trial judge, but, once having reached its own conclusion, will not shrink from giving effect to it”: at 551. Section 47(a) of the Magistrates Courts Act 1921 reflects that approach.
- [13]Turning, then, to the issue of inferences, the Court of Appeal of the Supreme Court of Victoria has held in Chong & Neale v CC Containers Pty Ltd [2015] VSCA 137 that the correct approach is that stated in the “oft-cited passage from Bradshaw v McEwans Pty Ltd” (citation omitted) to the effect that:
“(Y)ou need only circumstances raising a more probable inference in favour of what is alleged. In questions of this sort, where direct proof is not available it is enough… (if) the circumstances appearing in the evidence give rise to a reasonable and definite inference: they must do more than give rise to conflicting inferences of equal degrees of probability so that the choice between them is a mere matter of conjecture… But if circumstances are proved in which it is reasonable to find a balance of probabilities in favour of the conclusions sought then though the conclusion may fall short of certainty it is not to be regarded as mere conjecture or surmise.”: at [45].
- [14]In the New South Wales Court of Appeal in Sze Tu v Lowe (2014) 89 NSWLR 317 Gleeson JA held, again by reference to cited authority, that, where inferences were to be drawn, the proponent has to establish “that the circumstances appearing in the evidence give rise to a reasonable and definite inference and not merely to conflicting inferences of equal degrees of probability”: at 397 [463].
Jones v Dunkel principle
- [15]In this particular case the respondent, as defendant, neither gave nor called any evidence.
- [16]As recently observed in Goodhue v Volunteer Marine Rescue Association Incorporated [2015] QCA 234, the rule in Jones v Dunkel (1959) 101 CLR 298 concerns the drawing of inferences, in that it enables a tribunal of fact more confidently to draw an inference of fact in favour of a party from the opposing party’s unexplained failure to call a witness whom that party would be expected to call in order to give evidence concerning the fact: at [28].
- [17]It is particularly useful in the context of this case to note the observation by Evatt J - though some decades before Jones v Dunkel – that, where a defendant called no evidence to support his defence, it is impossible to say that the trier of fact was not entitled to pay regard to that fact, especially where the complete information of relevant matters lay within that person’s knowledge: Martin v Osborne (1936) 55 CLR 367 at 382.
Undisputed facts
- [18]In oral submissions, counsel for the appellant, resiling a little from the written Outline of Submissions, contended that (apart from evidence of “supply” and the appellant, as plaintiff, being a “consumer”) the following facts were the actual basal facts from which inferences can be drawn to satisfy the test of the relevant conduct being “in trade or commerce”:
- (a)there were two advertisements placed by the respondent which were tendered (being, respectively, Exhibits 3 and 7);
- (b)$52,000.00 was paid for a second hand and unregistered vehicle which had no roadworthy or safety certificate;
- (c)the trailer was of a “commercial” kind and capable of carrying animals (which fell within the definition of “goods” in the ACL); and
- (d)with respect to the two advertisements:
- (i)there was a uniform colour scheme;
- (ii)the two trailers as shown in the advertisements were at the same location; and
- (iii)in Exhibit 7, the “second” trailer was on blocks upon which paint was observable which was the same colour as the blue colour on both of the trailers.
- [19]As for the argument about evidence of who did, or caused, such painting, in the evidence-in-chief of Mr Seiler (who was the sole director and sole shareholder of the appellant/ plaintiff) in relating the conversation that he stated that he had with the respondent/ defendant there was no mention of paint at all. Furthermore, when cross-examined, although reference was made to Exhibit 3 (concerning the relevant trailer in question), no evidence was proffered as to any knowledge of any painting of any kind. Consequently, the only conclusions can be those which are open to be inferred.
- [20]As for the contention about “ownership”, the only direct evidence is that, in an answer to the Notice to Admit Facts, the mobile number of the defendant was admitted to be that which appeared on both Exhibit 3 and Exhibit 7. Inferences from that will be canvassed later.
Findings of contested primary fact
- [21]I have noted the learned Magistrate’s findings in the decision that he gave (which was at 9.04am on Tuesday, 19 May 2015). One actual finding on contested evidence is that the purchase was not made “on an as is, where is basis”: T: 3. That is not in issue here. Furthermore, the learned Magistrate accepted that the supply was conduct engaged in pursuant to “the contract” between the appellant and the respondent: also at T: 3. I give respect and weight to all conclusions reached, as required.
What inferences, then, are open?
- [22]First, it can be reasonably and more probably inferred that the respondent was the owner of the trailer supplied, particularly where the respondent led no evidence of any other right or interest that he might have held in the trailer that became the subject of the supply, particularly in circumstances where the Invoice signed by the respondent – although not accepted by the learned Magistrate as containing the qualification relevant to a caveat emptor – is entirely consistent with an absolute and unconditional right to sell (being the more probable inference in all of the circumstances).
- [23]Secondly, although Exhibit 7 does contain the respondent’s mobile number (as admitted), there was no evidence as to when the second advertisement (Exhibit 7) was caused to be placed by the respondent. Nevertheless, considering what appears under the designated heading “Seller Details” in Exhibit 7 (which includes that mobile phone number), it can be inferred on the relevant tests that the respondent was the seller of it, again in circumstances where the respondent neither gave nor called evidence. A potential problem about the respondent being a seller but not an owner is that he could have been selling on commission (with all its implications). But the paucity of evidence overall does not trigger such a concern.
- [24]Thirdly, given the conclusion just reached, the second photograph in Exhibit 7 can lead to a proper inference that the second trailer shown in the background was the trailer supplied under the relevant contract and not a “third” trailer (where that itself could lead to an inference of more assets available, although it could then have been someone else’s trailer) – but, of course, any consequential inference as to the date of advertising is a matter of speculation, because, though consistent with a photograph taken when both trailers were “on site” (wherever that was), it does not assist as to when the second trailer was advertised. Thus, no proper inference is open that both were available for sale in any contemporaneous sense or that there was some business being conducted of selling such trailers. The potential “rural” setting shown in the photographs appears to be implacably neutral for this aspect, despite the presence of a shed, or sheds, giving no reasonable ground for definitively inferring some specific business activity being conducted.
- [25]Fourthly, while it can be inferred on the appropriate test that the Exhibit 7 (first photograph) does show blue paint on both the trailer in question and the wooden block lying on the ground, there is no evidence as to how long before the photograph was taken that that colour was put on that block or even who did it.
- [26]Fifthly, it cannot be properly inferred from both photographs exhibited, plus the additional evidence either undisputed or accepted by the learned Magistrate, that the respondent was conducting a business of selling “rebuilt” trailers. But the fact that Exhibit 7 refers to the trailer advertised there as having “one owner” and “fresh paint and scrolls” does lead to an inference that whenever the fresh painting was done and whoever did it, it was done for the seller’s purpose in circumstances where I have already inferred that the seller was the respondent. Nevertheless, no more probable inference of any business of reselling is open by reason of the “one” owner.
- [27]There was “admitted” evidence that the respondent held an Australian Business Number (ABN). Nevertheless, that ABN was not used in any advertisement and did not appear on the respondent’s Invoice (which was not marked as a “tax invoice”), and the payment did not include GST. It does seem to be equally open that the respondent had previously conducted some “enterprise” within the terms of the relevant GST legislation but that that had then ceased at some unknown time, at least for these two trailers.
Conclusions
- [28]The outcome, in the end, depends upon whether the inferences that can separately be drawn give rise to a reasonable and definite overall inference that this supply was “in” trade and commerce and not give rise merely to competing inferences of equal degrees of probability about whether it was or not. That is, as strands in a wire rather than links in a chain, the ultimate conclusion does not necessarily depend on each potentially supporting fact meeting the inferential reasoning test, though helpful in evaluating the evidence of different aspects. Applying that approach, even though the commercial nature of the trailer being supplied is to be accepted, the mere fact of supply (whether as owner or as other kind of seller) and repair (particularly by repainting), in the absence of any further compelling circumstances, leads to the conclusion that the appellant did fail to satisfy the requirement that this conduct was not merely conduct for the purposes of, or in connection with, carrying on trading or commercial activities but, rather, was conduct in the course of an activity or transaction which of its nature did bear a trading or commercial character. In so inferring, it obviously leaves the overall evidence well short of both Bevanere and Lake Koala, although, obviously, factual similarity alone does not determine the outcome. Consequently, the trial Magistrate’s decision was not in error and the appeal should be dismissed, apart from one question of costs.
Costs
- [29]The learned Magistrate gave his decision on costs, after hearing submissions immediately following the handing down of his decision, the former being at 9.12am on Tuesday, 19 May 2015.
- [30]Three particular questions need to be considered. First, there was what is contended to be by the respondent a “Calderbank offer”. Secondly, it was then necessary for the learned Magistrate to determine, pursuant to r 189(4) of the Uniform Civil Procedure Rules 1999, whether he should make an order “otherwise”, where the respondent had disputed certain facts contained in the Notice to Admit Facts and those facts were proved in the proceeding. Thirdly, there was the issue of costs reserved after an application that had been listed for hearing on 24 February 2015 and was adjourned.
- [31]Dealing with the Calderbank offer first, it was held in Calderbank v Calderbank [1976] Fam 93 that the structure of such an offer is that it is to be marked “without prejudice”, that it makes an offer of settlement, and that it warns that the letter will be relied upon on the question of costs if and when the issue arises (i.e. “save as to costs”): see the discussion in Elite Protective Personnel Pty Ltd v Salmon [2007] NSWCA 322 at [97]. Here, all requirements have been met. While I accept that, sometimes, specific reference is made in this third requirement to the aspect of seeking “indemnity” costs, Calderbank does not expressly demand that aspect. What the “saving” aspect is directed to is that the reservation of the right to rely upon the offer in relation to questions of costs makes it an “open” offer for that purpose only and, therefore, can be referred to by a court in considering costs. As was stated in Roberts v Prendergast [2013] QCA 89, by Gotterson JA, while the relevant documents in that case did not contain some of the characteristic features of a Calderbank offer and did not refer expressly to Calderbank principles, they did unquestionably convey, and offer, terms for settlement that were capable of acceptance: at [29]. Thus, it is the overall effect of the offer which needs to be considered.
- [32]Accordingly, I will take the letter of 9 September 2014 as being able to be considered in the determination of costs.
- [33]But, as Applegarth J explained in Westpac Banking Corporation v Jamieson [2015] QCA 84, a determination is then necessary as to whether the rejection of the offer was, as has been expressed in some cases, “plainly unreasonable”. In the determination of that matter, the relevant factors have been held to be:
- the stage of the proceeding;
- the time allowed;
- the extent of the compromise offered;
- the (then) prospects of success;
- the clarity of the terms as expressed; and
- whether the offer foreshadowed an application for indemnity costs in the event of rejection.
: at [11].
- [34]In this particular case, while there was some dispute about the particular term of the offer that any “new” supply would be of a trailer with a “checker plate floor in sound condition”, rather than that demanded by the appellant, the basic reason why the rejection was not unreasonable, whether plainly or not, was that it was limited to acceptance in a time period of just over two days. See, for instance, the same outcome where there was only one day: Perisher Blue Pty Ltd v Nair-Smith (No 2) [2015] NSWCA 268. That, taken together with the absence of any reference to seeking “indemnity” costs (although more minor), I consider that the non-acceptance of the terms of the Calderbank offer is such that it is not relevant to the determination of costs in this case.
- [35]The second question is more concerning. It is clear that r 189(4) of the Uniform Civil Procedure Rules 1999 requires a court to pay specific attention to it if only because it contains the word “must”. It was not suggested that the assertion by the appellant in its written Outline of Submissions was wrong when it stated that the respondent had disputed 14 out of the 18 facts alleged in the Notice to Admit Facts and the appellant had then gone on to prove 13 of those disputed facts at trial. In such circumstances it necessitated a real consideration of this question. Applying the principles of House v R (1936) 55 CLR 499 at 504-505, the discretion as to the way in which costs were ordered has been grounded in error, permitting this Court to determine the matter afresh.
- [36]Thirdly, there is the matter of reserved costs. It is clear from r 698 of the Uniform Civil Procedure Rules 1999 that, in such a circumstance, the costs so reserved “follow the event, unless the Court orders otherwise”. Here, the learned Magistrate has permitted it to follow the event, though the exact reasoning is somewhat obscure. But, of necessity now, the issue of costs is reopened.
- [37]Because of the considerations that I have undertaken, there is nothing about the interlocutory application which, taking all matters into account and not just those proffered by the appellant in circumstances where there was an amendment made to the respondent’s defence, the effect of r 698 should be given its default consequence.
- [38]Nevertheless, an order should have been made under r 189(4) of the Uniform Civil Procedure Rules 1999. This is distinguishable from Michail v Australian Alliance Insurance Co Ltd [2013] QDC 284 in that a substantial admission of the disputed facts there occurred only on the trial date itself – and here that ought to yield a distinct order for costs rather than my estimation of some percentage reduction overall.
- [39]Accordingly, I intend to make an order varying the learned Magistrate’s order as to costs to make an exception which gives the costs of proving those admissions to the appellant. The power to make such orders is derived from s 47 of the Magistrates Courts Act 1921.
- [40]As for the costs of the appeal, s 47(f) of the Magistrates Courts Act 1921 gives this Court a wide discretion. While I will give leave to make submissions, should no further submissions be filed and served, I intend to order that the respondent recover its costs, fixed at 95% of those costs, to reflect the small success of the appellant on one particular question of costs.