McGraw-Hinds (Aust) Pty Ltd v Smith

144 CLR 633
24 ALR 175

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(Judgment by: MASON J)

Between: McGRAW-HINDS (AUST) PTY LTD
And: SMITH

Court:

Judges: Gibbs ACJ.
Stephen J.

Mason J.Jacobs J.
Murphy J.
Aickin J.

Subject References:
Constitutional Law (Cth)
Trade Practices

Judgment date: 5 April 1979

Sydney

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Judgment by:
MASON J

The issues in this appeal from a decision of the Full Court of the Supreme Court of Queensland relate to the construction, application and constitutional validity of s. 8 of the Unordered Goods and Services Act, 1973 (Q.), as amended ("the Act"). The Full Court held that the receipt of a document sent by the appellant to the Queensland Government Tourist Bureau ("the Bureau") constituted a contravention by the appellant of s. 8, that the section did not infringe the Constitution and that the magistrate's order dismissing the respondent's complaint should be set aside.

Section 8 provides:

"8. Asserting a right to payment for directory entries or prescribed services. (1) A person shall not assert a right to payment of any charge or fee for the making of a directory entry or the rendering of a prescribed service, whether made or to be made or rendered or to be rendered by him or another person and whether made or to be made or rendered or to be rendered within or without the State or partly within and partly without the State, unless he has reasonable cause to believe (proof of which shall lie upon him) that a note complying with section 7 has been signed by or on behalf of the person against or in relation to whom that right is asserted.

Penalty: $500.

(2) Without limiting the generality of subsection (1), in proceedings for an offence that is a contravention of that subsection the receipt by a person, at any place within the State, of a prescribed document relating to a directory entry or prescribed service that was sent or purports to have been sent, within or without the State, by or on behalf of the person who made or proposes to make that entry or rendered or proposes to render that service shall be deemed to be an assertion by that person, made at the place where the receipt occurs, of a right to payment from the first-mentioned person of a charge or fee for the making of the directory entry or the rendering of the prescribed service, as the case may be.

(3) In this section 'prescribed document' in relation to a directory entry or prescribed service means a writing that asserts or implies that the payment of a charge or fee should be made for the making of the directory entry or the rendering of the prescribed service or that sets out the price for the making of the directory entry or rendering of the prescribed service."

The words "a note complying with section 7" in s. 8(1) require reference to sub-ss. (3) and (4) of s. 7 which provide:

"(3) In order to comply with this section a note referred to in subsection (1) shall, in relation to a contract or agreement for the making of a directory entry, specify -

(a)

the particulars of the entry inserted or proposed to be inserted;

(b)

the amount of the charge or fee or the basis on which the charge or fee to be charged is or is to be calculated;

(c)

the name of the directory or other similar publication in relation to an entry in which the charge or fee is payable; and

(d)

the name and address of the person publishing the directory or other similar publication.

(4) In order to comply with this section a note referred to in subsection (1) shall, in relation to a contract or agreement for the rendering of a prescribed service, specify -

(a)

the particulars of the service rendered or proposed to be rendered; and

(b)

the amount of the charge or fee for the service or the basis on which the charge or fee to be charged is or is to be calculated."

The respondent's complaint charged the appellant with asserting a right to payment of a charge for the making of a directory entry, not having reasonable cause to believe that a note complying with the Act had been signed by or on behalf of the person against or in relation to whom the right was asserted. The particulars of the charge and the conduct of the case at first instance indicate that the prosecution relied upon the provisions of sub-ss. (2) and (3) of the Act in order to establish that the appellant had committed an offence under s. 8(1).

According to the undisputed evidence, the Bureau in Brisbane received in the post a document sent by the appellant. The front of the document took this form :

INTERNATIONAL TELEX DIRECTORY

INVOICE/STATEMENT

Published by McGraw-Hinds (Aust.) Pty. Ltd.

Suite 5, 686 New South Head Road,

Rose Bay 2029, Sydney. Australia

DATE 22/8/75

Your entry as below:

Telex Number: 40235

Reference Number: ET-375

Answer Back Code: QGTOURS AA40235

Annual Subscription: $68.50

Queensland Government Tourist Board, Previous Balance: ----

Adelaide St, Brisbane

* TOTAL $68.50

IF THE ENTRY IS DESIRED PLEASE USE THE PAYMENT ADVICE SLIP ATTACHED TO THIS STATEMENT.

* THIS IS NOT A DEMAND OR CLAIM FOR PAYMENT OF THE AMOUNT SHOWN.

* Contract and Invoice terms overleaf:

On the back of the document were six clauses or conditions, the first of which read:

"Upon payment of the pro-forma offered on reverse side your name and information as indicated will be included in our international directory".

Attached to the document was a duplicate differing from the front of the original in two respects only. The duplicate included the words "PLEASE RETURN THIS PORTION WITH PAYMENT TO:" followed by the name and address of the appellant. The figure "$68.50" opposite the words "ANNUAL SUBSCRIPTION" and "TOTAL" was omitted. The omission was accidental due to the failure of the carbon to make an imprint.

The appellant made no attempt to set up a case that there was reasonable cause to believe that a note under s. 7 had been signed.

On all issues of fact but one, the magistrate made findings adverse to the appellant. He found, in effect, that there was a receipt of a prescribed document, in the form of a writing that set out the price for the making of a directory entry, sent by or on behalf of the appellant who proposed to make that entry and hence, by virtue of the deeming provisions of s. 8(2), an assertion of a right to payment of a charge or fee for the making of a directory entry. Nevertheless, the magistrate dismissed the complaint upon the ground that the Bureau was not a person against or in relation to whom a right to payment of a charge or fee for the making of a directory entry could be asserted, because the Bureau was an instrumentality of the Crown and the Crown was not included within the meaning of the word "person" as used in s. 8(1).

On an application for an order to review, the Full Court of the Supreme Court appears to have accepted the findings of the magistrate adverse to the appellant. However, the Court held that the magistrate had erred in finding that the Crown was not a person under s. 8(1) against or in relation to whom a right to payment could be asserted. The Court rejected the appellant's submission that the Constitution, being of the opinion that trading practices and was therefore not inconsistent with s. 92.

For this Court the first issue is whether the Crown is comprehended by the term "person" where last mentioned in s. 8(1). Since the Act does not bind the Crown (s. 13 of the Acts Interpretation Act, 1954 (Q.), as amended), or, in other words, subject the Crown to the liabilities imposed by the Act, the Crown is necessarily excluded from the meaning of the word "person" in s. 8 where the word is used to describe a person committing an offence against the section. But the presumption that the Crown is not bound by statute unless the contrary is expressly stated or appears by necessary implication has no application to benefits arising by virtue of statute. The Crown is protected and not prejudiced by its inclusion within the description of those persons against whom an offence under the section can be committed. And it is not rational to suppose that the legislature intended to permit an undesirable trading practice to be adopted against the Crown when it prohibited resort to that practice against everyone else. In my opinion, the Crown is, under s. 8(1), a person against or in relation to whom a right to payment of a charge or fee for the making of a directory entry or the rendering of a prescribed service can be asserted.

The interpretation of s. 8 is an essential preliminary to a consideration of that part of the appellant's case that depends on s. 92 of the Constitution. There are two limbs to the definition of "prescribed document" in a writing that asserts or implies that the payment of a charge or fee should be made", and the second of "a writing... that sets out the price". In my opinion, these two limbs, generally speaking, contemplate distinct types of writing. The first limb is designed to catch those documents which state or suggest that the recipient is under a legal obligation to pay a charge or fee to the sender for the making of a directory entry or the rendering of a prescribed service, whether the obligation arises from a contract or otherwise. The second limb is apt to cover those documents which do not state or suggest that there is a legal obligation to pay a charge or fee but merely set out the price which will be payable if the recipient enters into a contract with the sender to pay the consideration set out in the document in return for the making of a directory entry or the rendering of a prescribed service.

This construction of the Act is prompted by a variety of considerations. First and foremost there is the language of the subsection. The first limb of s. 8(3) looks to an assertion or implication that a payment of the relevant charge or fee should be made. The word "should" imports the existence of a legal obligation to make the payment. For a document to come within the first limb, it must contain a demand for payment that proceeds or purports to proceed from a basis of legal entitlement, viz. a contract. The demand itself may be asserted or implied. An assertion connotes some positive claim to payment of the charge or fee; an implication signifies something less than a positive claim, something in the nature of a suggestion or intimation.

As I have remarked, the words of the second limb of s. 8(3) appear to comprehend documents of a type quite different from those included within the first limb of the sub-section. In my opinion, "a writing... that sets out the price" for the making of a directory entry or the rendering of a prescribed service simply refers to a document which states the consideration that would be payable if the recipient of the document were to enter into a contract under which the sender would be entitled, upon the making of the entry or the rendering of the service, to payment by the recipient of that consideration.

To hold that the word "price" in the second limb denotes the consideration payable pursuant to a legal obligation to pay for the making of a directory entry or the rendering of a prescribed service would, in effect, render the second limb of s. 8(3) otiose by depriving it of a meaning and content distinct from that of the first limb. Furthermore, the change in language from "charge or fee" in the first limb to "price" in the second tells against that interpretation. The words "charge or fee", particularly in the context in which they appear, are certainly apt to denote a payment to which a person is entitled because he has already performed some relevant legal obligation. But the word "price" as employed in the second limb properly describes, in my opinion, the amount payable by the recipient of the document if he were to choose to contract with the sender for the making of a directory entry or the rendering of a prescribed service. Although one often speaks of a "charge" or "fee" for a service rendered and of a "price" payable for property, this distinction in usage seems to have no place in s. 8(3).

The meaning which I would accord to the sub-section is strengthened by reference to the wording of s. 8 are, of course, closely related, since the combined operation of their provisions defines the circumstances in which a person is deemed to have committed an offence under s. 8(2), a person must be one who "made or proposes to make" a directory entry or "rendered or proposes to render" a prescribed service. In general, only a person who has made an entry or rendered a service would, within the first limb of s. 8(3), assert or imply that payment of the relevant charge or fee should be made. Likewise, it is a person who proposes to make an entry or render a service who would be concerned to set out the price within the second limb of the sub-section.

I acknowledge that this construction of s. 8 produces inconvenient results. It reads the section as prohibiting the circulation of a price list or list of charges for directory entries and for services, whether supplied in response to a request for information or not. It also reads the section as prohibiting the sending of an invitation to treat or an offer to contract. The prohibition is qualified because it has no application if there is reasonable cause to believe that a note complying with s. 7 has been signed. But it is quite unreal to think that in the ordinary course of business and commercial affairs a person minded to send by post any of the documents to which I have referred would secure an antecedent signed note complying with s. 7. It would not be practical so to do. No doubt such a note could be brought into existence in advance of the personal delivery to an intending customer of any of these documents, but in that event there would be no point in delivering a price list or list of charges though there might be some point in delivering an invitation or offer. However, these consequences, inconvenient as they are, are not in themselves a sufficient reason for giving the language of s. 8(3) a different construction. This is because the language does not lend itself to another interpretation.

I have said that the effect of s. 8 is to prohibit the circulation by post of a price list or a list of charges and the sending by post of an invitation or offer. I say that, notwithstanding that s. 8(2) operates in relation to the receipt of a document. The sub-section is inclusive in its operation and its purpose is to give to the prohibited act a location at the place of receipt, so as to ensure that s. 8 catches documents which are despatched from places outside Queensland. But this is by the way, for to make the receipt of a document an offence is effectively to prohibit the despatch and the delivery of the document.

The document received by the Bureau from the appellant is, in my view, a "prescribed document" only under the second limb of s. 8(3). I do not accept the argument for the respondent that the document is capable of being brought within the meaning of the first limb of the sub-section. No doubt the document was calculated to mislead the recipient into the belief that there was some obligation to pay the appellant for the publication of a directory entry, but this does not determine whether the document asserted or implied that the payment should be made. Although the document in form appears to be an invoice or statement of account and is headed "Invoice/Statement", it explicitly states that it is not a demand or claim for payment. However deceptive its form may be, the document must be read as a whole, and when it is read in its entirety and the words in capitals at the foot of the front page are taken into account, it emerges that the amount stated is payable only in the event that the offer is accepted in the manner indicated. An express statement that the document is not a demand or claim for payment seems to me to be necessarily inconsistent with any assertion or, a fortiori , any implication that the relevant payment should be made. In substance, the document is an offer made by the appellant to publish an appropriate directory entry upon payment of the consideration stipulated in the document and, as such, "a writing... that sets out the price for the making of a directory entry" within the second limb of s. 8(3).

The constitutional issue raised by the case is accordingly confined to the question whether the Act to the extent that they create an offence in relation to the receipt of a document setting out the price for the making of a directory entry. It was argued for the respondent that s. 8 does not strike at anything which is an essential element of trade, commerce and intercourse among the States, and hence is incapable of infringing s. 92. The suggestion was that the receipt of a prescribed document is something which stands outside the strict conception of interstate trade and commerce which has prevailed for the purposes of s. 92. The answer to this argument is that the prohibition against receipt is, in truth, a prohibition against the despatch or delivery of a prescribed document, and that the despatch and delivery of communications across a State border in the course of commerce, more particularly when those communications are offers capable of being converted into a contract by acceptance, form part of that interstate trade, commerce and intercourse which is protected by s. 92. Just as the movement of goods and persons across a State border is protected by s. 92, so also is the sending of communications, whether the movement across the border takes place pursuant to the requirements of a contract or not. We are not here concerned with the question whether a particular contract forms part of interstate trade, whether the contract calls for the delivery of goods from one State to another and whether, in consequence of that contract, one of the contracting parties is engaged in interstate trade or the transport of the goods forms part of that trade: cf. Samuels v. Readers' Digest Association Pty. Ltd. (1969) 120 CLR 1 . We are now concerned with the question whether the sending of an invitation to treat or an offer to contract struck at by s. 92. I need do no more than refer to the observations of Dixon C.J. in Hospital Provident Fund Pty. Ltd. v. Victoria (1953) 87 CLR 1 , at pp 14-15 and my comment upon them in H. C. Sleigh Ltd. v. South Australia (1977) 136 CLR 475 , at pp 507-508. A contrary view seems to have been expressed by Kitto J. in his judgment in the Readers' Digest Case (1969) 120 CLR, at pp 31-32 , but it was not a view which commended itself to the other members of the Court.

The next and final question is whether s. 8 may be characterized as a regulatory law and on that account escapes the destructive effect of s. 92. It is established by the Readers' Digest Case and by Mikasa (NSW) Pty. Ltd. v. Festival Stores (1972) 127 CLR 617 that a law which regulates trade practices, even a law which prohibits undesirable trade practices, may be compatible with s. 92. But to constitute a permissible regulation it must appear that there is, or appears to be, an undesirable trade practice and that the law in question is a reasonable regulation of the trade in the light of that practice (North Eastern Dairy Co. Ltd. v. Dairy Industry Authority of NSW (1975) 134 CLR 559 , at pp 612, 614-615 ). In this case I do not doubt that some of those who are engaged in publishing trade directories and in rendering services have resorted to objectionable practices in seeking subscriptions in business and that there is a consequential need to regulate the trade. But I cannot think that a law which goes so far as to prohibit the despatch and delivery of price lists and lists of charges, even when supplied in response to a request for information, and to prohibit the despatch and delivery of invitations to treat and offers to contract, subject only to the qualification mentioned in s. 8, is a reasonable regulation of the trade. In my judgment s. 8 travels beyond what might be thought necessary to regulate the trade with a view to protecting the public from malpractice.

In the result I am of the opinion that the second limb of s. 8(3) in its application to documents received from places outside Queensland contravenes s. 92 (see s. 4 of the Acts Interpretation Act (Q.)). I would accordingly allow the appeal.