Trade Practices Law provisions constitutional

The High Court provides some comfort to the Commonwealth GovernmentIn another note in this month's Law Reporter we comment on the High Court's important decision in the Hughes case.

Although the Commonwealth Government and State governments in that case were able to defend their right to pursue proceedings under the Corporations Law (with a clear warning that this might be the last time that they were successful - see separate note) the High Court has shown in the Truth About Motorways case that it is not in any way averse to the interest of the Commonwealth, if in the view of the court, the Government has a sound constitutional basis to pursue legislation.

In the case of Truth About Motorways Pty Ltd v Macquarie Infrastructure Investment Management Ltd ((2000) 74 ALJR 604), although the Commonwealth Government was not in fact a party to the litigation it was a very interested and anxious observer on the fate of provisions of the Trade Practices Act (the Act).

The case is also interesting because it clearly illustrates the willingness of the court to allow citizens to seek remedies in matters involving the public interest, notwithstanding that the relevant citizen may not appear to have an immediate interest in the particular matter.

The case concerned certain events surrounding the building of certain roads in New South Wales which were to become tollways (the Eastern distributor) and the ability of individual citizens to seek remedies under section 52 of the Act in relation to claims made about the relevant roads. Certain statements were made by a manager of unit trusts about the toll road. It was alleged that the manager had alleged that the toll road would produce certain financial results (flowing from projected traffic use). The statements were challenged as misleading.

As with the Hughes case the facts in this case are not the critical issue - the more important question was the evaluation of the constitutional power of the Commonwealth and in this case the rights of citizens.

The relevant details of the case are taken from the Law Book Company's Law Journal reports of the decision.

The applicant commenced proceedings in the Federal Court, claiming that the respondent contravened section 52 of the Act, and two related provisions of Part V. The applicant sought a declaration that the respondent had contravened section 52, and an order, in the nature of a mandatory injunction, compelling the publication of corrective advertising. The applicant claimed no special interest in the subject matter of the dispute. It had not suffered any loss or damage by reason of the respondent's conduct. It invoked the jurisdiction conferred on the Federal Court by sections 80 and 163A simply in its capacity as a (corporate) person.

Section 52 of the Act, which appears in Part V, provides that a corporation shall not, in trade or commerce, engage in misleading or deceptive conduct. Section 80 of the Act provides that the Federal Court of Australia may grant injunctive relief where, on the application of the Australian Competition and Consumer Commission "or any other person", it is satisfied that a person was engaged, or is proposing to engage, in conduct in contravention of a provision of Part V. Section 163A of the Act also provides that "a person" may institute proceedings, in the Federal Court, seeking, in relation to a matter arising under the Act, a declaration in relation to the operation or effect of (among others) a provision of Part V, and that the Federal Court has jurisdiction to hear and determine the proceedings.

The respondent challenged the validity of sections 80 and 163A of the Act. In particular, the respondent submitted that those sections were invalid insofar as they purported to authorise the institution of proceedings by a person who had neither a direct nor a special interest in the subject matter of the proceedings. In such a case, it was put, there was no "matter" for the purpose of Chapter III of the Constitution, because there was no justifiable controversy. The proceedings were removed to the High Court.

The High Court delivered six separate but unanimous judgments. This spectacle of six separate judgments - although the judgment of Hayne J was very short - in a case where one would have expected a single judgment of the court to be delivered on this important issue is a real worry in ensuring we can have a clear view of the way the High Court sees the relevant legal issues. The court held that sections 80 and 163A of the Act were not invalid insofar as they purported to confer standing on a person such as the applicant to bring the present proceedings.

A number of different reasons were propounded by the members of the High Court in reaching the relevant conclusion but the long and the short of it is that the court was prepared to recognise the rights of citizens to bring claims of this kind in matters of public importance.

In my view, this is an important statement of principle which augurs well for the interests of interested persons pursuing pro bono public interest cases in appropriate circumstances - for example when important initiatives are taken by governments involving the environment, and similar issues of great importance.

Disclaimer

The purpose of this database is to provide a full-text record of all articles that have appeared in the CDJ since February 1997. It is aimed to assist in the research and reference process. The database has a full-text index and will enable articles to be easily retrieved.It should be noted that information contained in this database is in pre-publication format only - IT IS NOT THE FINAL PRINTED VERSION OF THE CDJ - therefore there might be slight discrepancies between the contents of this database and the printed CDJ.