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[2016] QSC 242
The plaintiff in this application alleged that the defendant engaged in misleading or deceptive conduct against the trustee of a unit trust, and the trustee was a person who suffered loss or damage under s 82 of the Trade Practices Act 1974 (Cth). [1]. Specifically, it was argued that the rights of the former trustee against the defendant, including the TPA claim under s 15(1) of the Trusts Act 1973, vested in the plaintiff upon its appointment as replacement trustee. [3].
The defendant contested the suggestion that the causes of action alleged under the TPA were assignable to the plaintiff, on the basis that that was not possible that such rights could be vested in a person or entity who did not suffer the loss claimed. [4]. The defendant sought to strike out the TPA claim on the ground that it did not disclose a reasonable cause of action, or for summary judgment on the ground that the plaintiff lacked any real prospect of success on that part of its claim. [5]. Referring to Park v Allied Mortgage Corporation Ltd (1993) ATPR (Digest) 46-105, amongst an extensive list of other authority, the defendant contended that damages under s 82 of the TPA for contravention of s 52 are only recoverable by the person who directly suffers loss under s 82(1). [7].
The issues arising were whether the operation of s 82 permits a person who is not the person who suffers loss or damage by the conduct done in contravention of s 52 to recover any damages for loss or damage by the contravening conduct; whether the TPA claim is “property” within the meaning of s 15(1) of the TA; and whether, if s 15(1) of the TA operates to vest the TPA claim in the plaintiff, it is inconsistent with s 82 of the TPA and invalid under s 109 of The Constitution.
Central to the defendant’s argument was the proposition that the proviso to s 15(1) excluded from automatic transfer the right of a person to recover damages under s 82, since as a matter of proper construction, s 82(1) provides that only the person who suffers the loss or damage may recover it by action. [42]. Whilst initially wary that such a construction might lend a wider meaning to the proviso than the ordinary meaning of the text, his Honour concluded that s 15(1), indeed, operates to exclude from automatic transfer property that an Act of another State or Territory Parliament provides may not be transferred, clarifying: “In substance, s 15(1) is a machinery provision, and is not intended to operate to override the operation of a contrary applicable statute, whether it is a law of Queensland or another jurisdiction in the Australian federation”. [43]. Given that conclusion, it followed that if the TPA claim was property within the meaning of s 15(1), still the subsection did not vest the TPA claim that Lanai Apartments Pty Ltd may have had as trustee in the plaintiff upon the plaintiff’s appointment as the new trustee. [50]. Accordingly, on that ground the defendant’s application to strike out the relevant parts of the claim was successful. [51].
As for the application of s 109 of The Constitution, his Honour noted that the recent High Court decision of Bell Group NV v State of Western Australia (2016) 331 ALR 408 reiterated the “continuing relevance” of the question whether the State law would “alter, impair or detract from the operation of a law of the Commonwealth Parliament”, see The Kakariki (1937) 58 CLR 618, 630. The plaintiff argued that at trial it might be found that s 82 ought not be construed as if it expressly provided that, in relation to the TPA claim, “[only] a person who suffers loss or damage by conduct of another person that was done in contravention of a provision of Pt V … may recover the amount of the loss or damage by action …”, a submission made by the defendant which had been accepted by his Honour. [56]. Discounting that suggestion, his Honour succinctly noted:
“… that finding is not open to a judge of the Trial Division of this court at trial. That question of construction has been decided at the level of an intermediate Court of Appeal in the Full Court of the Federal Court in Pritchard v Racecage Pty Ltd and a judge of this court is bound to follow that decision on the proper construction of a section of Commonwealth legislation unless convinced that it is clearly wrong.” [57].
His Honour took the view that the operation of s 82 does not enable a person other than the person who suffered loss or damage by the conduct done in contravention of s 52 to recover, subject to the operation of bankruptcy and winding up laws. [58]. Conversely he observed that to the extent that s 15(1) would “vest” the TPA claim in the plaintiff it would confer a right to recover any loss or damage under s 82 upon a person who was not the person who suffered the loss or damage, contrary to the above. [59]. That would amount to a clear alteration, impairment or detraction from the operation of s 82 and would be invalid under s 109 of The Constitution. [60].
Accordingly, it was held that also on that alternative ground, the defendant’s application to strike out or to dismiss the proceeding would succeed. [61].
In the result it was ordered that the relevant parts of the further amended statement of claim be struck out. The plaintiff was ordered to pay the defendant’s costs of the application.