Case: Australian Competition and Consumer Commission v McCaskey [2000] FCA 1037 ; (2000) 104 FCR 8
Outcome: applied
respondent referred me to five decisions in this Court which it contended supported the narrow interpretation of the expression in connection with which found favour with Dowsett J in Worchild [2005] FCA 1792. The five cases in question were: Australian Competition and Consumer Commission v Maritime Union of Australia [2001] FCA 1549 ; (2001) 114 FCR 472 at [63] and [66] (pp 486-487); Australian Competition and Consumer Commission v Davis [2003] FCA 1227 at [21] and [22]; Australian Competition and Consumer Commission v Esanda Finance Corporation Ltd [2003] FCA 1225 ; Australian Competition and Consumer Commission v Capalaba Pty Ltd [2004] ATPR 41-976; and Australian Competition and Consumer Commission v McCaskey [2000] FCA 1037 ; (2000) 104 FCR 8. Those five decisions tend to support the proposition that the connection between the conduct complained of and a supply or possible supply of goods or services to a consumer must be direct and obvious. However, the point was not specifically addressed in any of them and was not the subject of detailed consideration in any of them. In McCaskey [2000] FCA 1037 ; 104 FCR 8 , at [44] [53] (pp 25 29), French J (as he then was) explained s 60 of the Act. At [44] (p 25 26), his Honour said: [44] The elements of the conduct prohibited by s 60 are as follows: It is the conduct of a corporation or a person to whom the extended operation of the Act applies. 2. It is conduct: (a) in connection with the supply or possible supply of goods or services to a consumer; (b) in connection with the payment for services by a consumer. 3. It is one or more of the following: (a) use of physical force; (b) undue harassment; (c) coercion. His Honour then referred to some matters of history and then gave a detailed exposition of the section at [47] [51] (pp 26 28) with which I respectfully agree. In those paragraphs of his judgment, his Honour said: It is the second limb of the conduct defined by s 60 namely "undue harassment or coercion in connection with the payment for goods or services by a consumer" that is in issue in this case. The words of the section are to be given their ordinary meanings relevant to the context in which they appear. The term "harass" as defined in the New Shorter Oxford English Dictionary defines from the French "harasser", a pejorative derivation of the word "harer" meaning "to set a dog upon". The definitions of the word are thus: "1. Trouble by repeated attacks. Now Freq; subject to constant molesting or persecution. Lay waste, devastate. Tire out, exhaust. Overwhelm with cares and misfortunes etc -- Chiefly as harassed." The meaning of primary relevance here is the first, but it is important to have regard to context in considering its application in s 60. In this respect judicial exegesis, in other statutory settings, of concepts such as "sexual harassment" is of little assistance. Sexual harassment under the Sex Discrimination Act 1984 (Cth) does not require a demonstration of repeated unwelcome approaches: Hall v A &amp; A Sheiban Pty Ltd [1989] FCA 72 ; (1989) 20 FCR 217 at 231; [1989] FCA 72 ; 85 ALR 503 at 514 (Lockhart J), at 240; 523 (Wilcox J), at 279; 567 (French J). And see O'Callaghan v Loder [1984] EOC 92-023 at 75,505. That proposition derived from the language of s 28(3) of the Sex Discrimination Act . Certainly it is consistent with the ordinary meaning of "harass" as involving an element of repetition to speak of a harassed state of mind arising out of one or more events: Johnson v Collier (1997) 142 FLR 409 at 412 (Anderson J). But there, "harassed" is used in the fourth of the defined meanings and relates to the state of mind of a person induced by an event or events none of them necessarily amounting to harassment. A person can feel harassed because something has gone wrong for which nobody is to blame. The word "harassment" as used in s 60 must serve two broad purposes. It describes a range of conduct, in connection with the supply of goods or services which involve, inter alia, applying repeated pressure to a consumer who is under no pre-existing obligation to acquire. It also describes conduct in relation to a consumer who is under an unfulfilled obligation to pay for goods or services. Given the range of cases that it can cover, the question whether or not there is harassment involves evaluative judgment. The word "undue" adds an extra layer of evaluation which is more relevant to the case of debt recovery than to the sale of goods or services. Repeated unwelcome approaches to a potential acquirer of goods or services could qualify as harassment and, so qualified, require very little additional evidence, if any, to attract the characterisation of "undue harassment". On the other hand a consumer who owes money to a supplier can expect repeated unwelcome approaches requesting payment of the debt if he or she does not pay. No doubt such approaches might also qualify as harassment. If legitimate demands are reasonably made, on more than one occasion, for the purpose of reminding the debtor of his or her obligation and drawing the debtor's attention to the likelihood of legal proceedings if payment is not made, then that conduct, if it be harassment, is not undue harassment. If, however, the frequency, nature or content of the approaches and communications associated with them is such that they are calculated to intimidate or demoralise, tire out or exhaust a debtor rather than convey the demand and an associated legitimate threat of proceedings, the harassment will be undue. Section 60 can also cover cases in which the conduct complained of lacks the element of repetition necessary to constitute harassment, undue or otherwise. This requires consideration of the term "undue coercion". The word "coercion" is defined in the Shorter Oxford English Dictionary thus: "1. The action of coercing; constraint, restraint, compulsion. Government by force; the employment of force to suppress political disaffection and disorder. Physical pressure; compression. Coercitive power or jurisdiction." The verb "coerce" is defined as: "1. To constrain or restrain by force, or by authority resting on force. To subject to restraint in the matter of (rare) 1780. To effect by compulsion." The collection of debts may involve coercion in the sense that the debtor is subjected to the pressure of the demand and the legitimate threat of civil process for recovery with the additional cost and damage to credit which that can involve. Such pressure may be thought of as coercion but is entirely legitimate and not "undue". Where the demand includes content which does not serve legitimate purposes of reminding the debtor of the obligation and threatening legal proceedings for recovery but is calculated otherwise to intimidate or threaten the debtor, then the coercion may be undue. So if a threat is made of criminal proceedings, or of the immediate seizure and sale of house and property, a remedy not available in the absence of retention of title or some form of security, the coercion is likely to be seen as undue. The threat of criminal proceedings itself may be an offence against State laws. Quite apart from content the manner or circumstances of a demand or communication, including the language used, the time and place at which it is made and the person to whom it is communicated, may go beyond the legitimate purposes of drawing attention to the existence of the obligation and the consequences for non-compliance. Again such a communication may amount to undue coercion. Obvious examples include the use of personally abusive or obscene language, conveying the demand to uninvolved family members, particularly children, or conveying the demand through a third party in order to embarrass the debtor when the debtor could reasonably have been the subject of a direct communication. Each case will turn on its own facts. Some useful examples of situations that may give rise to contraventions of s 60 are set out in the ACCC guidelines entitled "Debt Collection and the Trade Practices Act " published in July 1999. As pointed out of course that publication is not a statement of the law. It can only be a guide. The recovery of unpaid debts can be pursued with firmness, determination and civility. It can do all those things without resorting to bullying, bluff, misrepresentation or stand-over tactics. If it does the first and avoids the second it is unlikely to contravene the law. His Honour did not specifically address the question of what is meant by " in connection with " in s 60 of the Act. At [48] (p 27), his Honour did speak of pressure being applied to a consumer. The examples which his Honour gave were examples of pressure being applied to a consumer in that person's capacity as a consumer. But his Honour was not called upon to decide whether the expression " in connection with " should be construed widely, as is often the case, or narrowly by reference to the purpose for which s 60 was enacted. As the respondent submitted, correctly I think, there are only a handful of decisions in this Court which deal with s 60 of the Act. Most do not descend into any reasoned analysis of the section because the section appeared clearly to apply. There is no Full Court authority and no High Court authority on the meaning of the section. Rather, the focus of the argument was on the concept of " undue harassment ". Harassment also involves conduct directed at the person harassed in an immediate and direct fashion. It usually involves repetition. The assessment of whether conduct is properly characterised as harassment involves an evaluative judgment (per French J in McCaskey [2000] FCA 1037 ; 104 FCR 8 at [48] (p 27)). The word " undue " adds an extra layer of evaluation (per French J in McCaskey [2000] FCA 1037 ; 104 FCR 8 at [48] (p 27)). To be " undue ", the harassment must be disproportionate and patently unreasonable. These views as to the meaning of the core expressions in s 60 of the Act were supported by Hill J in Australian Competition and Consumer Commission v Maritime Union of Australia [2001] FCA 1549 ; 114 FCR 472 at [60] [62] (pp 485 486). In Johnson Tiles Pty Ltd v Esso Australia Pty Ltd [2000] FCA 1572 ; (2000) 104 FCR 564 , after referring to Burgundy Royale Investments Pty Ltd 18 FCR 212 , French J (as he then was) (with whom Beaumont and Finkelstein JJ agreed) said (at [86] [88]) (pp 598 599): ... It is also the case, on authority previously discussed, that the point of law could have been determined on a motion to strike out portions of the statement of claim raising the federal causes of action against the Territory respondents. In that sense it could properly have been said that the claim was not tenable as a matter of law. No relevant distinction could be drawn between the process of determining the point of law as a case stated or on a preliminary issue and determining it on a strike out motion. Indeed Burgundy Royale was cited by the Full Court in Unilan Holdings Pty Ltd v Kerin at 481 as authority for the proposition that the striking out of a portion of a pleading relating to a claim under the Trade Practices Act did not thereby deprive the Court of jurisdiction to hear a related claim in negligent mis-statement. See also Hooper v Kirella Pty Ltd at 15. The mere fact that a claim is found not to be tenable does not of itself deprive the Court of jurisdiction in non-federal claims comprising part of the same matter. If there be no federal jurisdiction properly invoked then there can be no accrued jurisdiction Carlton &amp; United Breweries Ltd v Castlemaine Tooheys Ltd [1986] HCA 38 ; (1986) 161 CLR 543 at 553 and see the discussion by Professor Zines, "Federal Associated and Accrued Jurisdiction", in B Opeskin and F Wheeler (eds) The Australian Federal Judicial System (2000), pp 294-295 and the apparent tension between Vietnam Veterans' Affairs Association of Australia New South Wales Branch Inc v Cohen [1996] FCA 981 ; (1996) 70 FCR 419 on the one hand and Post Office Agents Association Ltd v Australian Postal Commission (1988) 84 ALR 563 at 565 (Davies J) and Buck v Comcare (1996) 66 FCR 359 at 370 (Finn J). The Court in such a case of course does have a limited jurisdiction to determine whether its jurisdiction is properly invoked Mercator Property Consultants Pty Ltd v Christmas Island Resort Pty Ltd [1999] FCA 1572 ; (1999) 94 FCR 384 ; Khatri v Price [1999] FCA 1289 ; (1999) 95 FCR 287. In the ordinary course the contention that a claim is not tenable will not go to jurisdiction unless dependent upon a submission that the claim is outside jurisdiction. And indeed, within that class a claim may be untenable because its very nature denies its character as an element of any matter or controversy in respect of which the Court can exercise jurisdiction. So a proceeding based upon the proposition that the Commonwealth Constitution is invalid does not disclose a matter arising under the Constitution or involving its interpretation Nikolic v MGICA Ltd [1999] FCA 849. A claim may also be a sham reflecting no genuine controversy and therefore establishing no matter in respect of which the Court may exercise its jurisdiction. There has been discussion of so called "colourable" claims made under the Trade Practices Act for the improper purpose of fabricating jurisdiction. The mere fact that a claim is struck out as untenable does not mean it is colourable in that sense. The pleading of the s 52 claim in this case advanced the legitimate forensic purpose of endeavouring to establish a cause of action which would not require proof of a duty of care. Notwithstanding its precipitate initiation and chequered history, I am not satisfied that it was colourable in the sense that would deprive this Court of jurisdiction to deal with the matter including any non-federal claims that may form part of it. I agree with French J that the mere fact that a claim is struck out as untenable does not mean that it is colourable in the sense that it was made for the improper purpose of fabricating jurisdiction. The respondent accepted these propositions. It nonetheless submitted that the applicant's claim was colourable because: Factors (b), (c) and (d) seem to me to be, at best, neutral. None of them, whether looked at on its own or in combination with one or more of the others, advances the respondent's submission.