Doctor’s opinion not given in trade or commerce so VCAT had no jurisdiction

In a landmark decision with profound implications for VCAT’s Fair Trading Act, 1958 jurisdiction over lawyer-client disputes about professional negligence and fees, a Deputy President of VCAT has recognised that it did not have jurisdiction to hear a former client’s misleading and deceptive conduct claim brought against ‘a professional’ in the traditional sense of the word, in relation to professional advice. The claim was brought under s. 9 of the Fair Trading Act, 1958 (the state analogue of s. 52 of the Trade Practices Act, 1974), which says:

“(1) A person must not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive”.

The case is Stagliano v Duke [2007] VCAT 1070. The applicant was injured at work, and made a Workcover claim. His employer’s Workcover insurers had him examined. The doctor wrote a report and sent it to the insurer. That professional opinion was not given in trade or commerce, even though it was given pursuant to a contract with the insurer, and for a fee, Deputy President Steel held, for the following reasons:

’10. … Counsel argued that the provision of a medical report in the circumstances of his case was not conduct in trade or commerce. Counsel relied on the decision of the High Court in Concrete Constructions Pty Ltd v Nelson (1990) 169 CLR 594, particularly (at CLR 602) the observation of Mason CJ, Deane, Dawson and Gaudron JJ that the phrase trade and commerce a has a restricted operation. In a passage which is frequently quoted, they construed it to refer

“… only to conduct which is itself an aspect or element of activities or transactions which, of their nature, bear a trading or commercial character. So construed, to borrow and adapt words used by Dixon J in a different context in Bank of NSW v The Commonwealth, the words `in trade or commerce’ refer 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.”

11. Later (at 603-4) their honours said

“Indeed, in the context of Pt V of the Act with its heading `Consumer Protection’, it is plain that s 52 was not intended to extend to all conduct, regardless of its nature, in which a corporation might engage in the course of, or for the purposes of, its overall trading or commercial business. 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. What the section is concerned with is the conduct of a corporation towards persons, be they consumers or not, 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. Such conduct includes, of course, promotional activities in relation to, or for the purposes of, the supply of goods or services to actual or potential consumers, be they identified persons or merely an unidentifiable section of the public. In some areas, the dividing line between what is and what is not conduct `in trade or commerce’ may be less clear and may require the identification of what imports a trading or commercial character to an activity which is not, without more, of that character.”

12. As the Respondent’s counsel submitted, the distinction drawn by the High Court in Concrete Constructions between actions performed in the course of or for the purposes of commercial activity and actions which of their own nature have a trading or commercial character was applied in Chapman v Luminis Pty Ltd ([2001] FCA 1106) by Justice von Doussa in the Federal Court in a way which is of assistance in the present case.

13. Chapman v Luminis dealt with issues about the construction of the Hindmarsh Bridge. The applicants who were developers claimed they suffered loss when construction was delayed as a result of declarations made by the relevant minister under the Aboriginal and Torres Strait Islander Heritage Protection Act 1984 (Cth) (the Heritage Protection Act). They sued amongst others Professor Saunders, who had prepared the report required by the Act and Luminis Pty Ltd and Dr Fergie, who provided consultancy services including a report to the applicant under the Heritage Protection Act, the Aboriginal Legal Rights Movement. The applicants (the Chapmans) alleged that Professor Saunders and Dr Fergie prepared their reports in a way which contravened section 52 of the Trade Practices Act 1974 (Cwth). Section 9 of the Fair Trading Act 1999 is in the same terms as section 52.

14. Justice von Doussa referred to the passages in Concrete Constructions which I have quoted. After examining some other aspects of the Trade Practices Act which are not relevant here, he went on (in paragraph 177) :

“In my opinion the applicants’ contention that merely because the report was prepared by Professor Saunders in the course of carrying out the consultancy agreement it was prepared in trade or commerce is a contention that asserts the same broad construction of s 52 that was rejected in Concrete Constructions.”

15. His Honour gave some weight (in paragraph 178) to the fact that Professor Saunders’ report was prepared as part of a statutory function and concluded it was not conduct in trade or commerce.

16. Counsel for the Respondent before me contended that the existence of a statutory duty was not the deciding factor in Chapman v Luminis, pointing out that the court reached a similar conclusion in relation to Dr Fergie, another respondent in that case. Dr Fergie’s report, as Justice von Doussa noted, was not part of the performance of a statutory function, though it was prepared for use in an application under an Act. His Honour said (at paragraph 187):

“The purpose of the report was to provide Dr Fergie’s professional assessment and opinion upon the Aboriginal tradition that she was asked to consider. The report was the intellectual product of her activities. In this respect, the distinction considered by Santow J in Prestia v Aknar at 190, 193 is to be noted. The distinction is one to be drawn between representations about the intellectual product or about the professional practice which generates it as distinct from the intellectual product itself. Representations of the former, but not the latter kind, bear a trading or commercial character.”

17. Having drawn that distinction, His Honour concluded (at paragraph 190) that Dr Fergie’s report “did not constitute conduct which is itself an aspect or element of activities or transactions which, of their nature, bear a trading or commercial character”.

18. While the subject matter of Dr Fergie’s report in Chapman v Luminis (aboriginal tradition) was vastly different to the reports prepared by Dr Duke and Dr Jones in the present cases, the position of Dr Fergie is analogous to the Respondents in these cases.

19. Here, the reports of Dr Duke and Dr Jones provide professional assessment and opinion about Mr Stagliano to a third party, as part of a statutory process. Dr Duke and Dr Jones may be in a commercial relationship with the third party (the insurer) but that does not mean that the reports themselves bear any trading or commercial character. Each report itself is an intellectual product which is not of a trading or commercial character.

20. Without further consideration, it is clear that the statements in the reports which the Applicant alleges to be conduct in contravention of section 9 of the Fair Trading Act 1999 were not made in trade or commerce and are not subject to that section and accordingly the Applicant’s claims are not within the Tribunal’s jurisdiction.’

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