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Inside track: Competition and Consumer Law

01 October 2019

#Competition & Consumer Law

Inside track: Competition and Consumer Law

In the media

Southern Response wants to cut litigation funder out of potential settlement
Southern Response is still pondering whether to appeal the High Court’s decision on its “deceptive conduct” – and it seems that it wants the claimants to avoid having to pay a portion of any settlement to the litigation funder, Claims Funding Australia (28 September 2019).   More... 

Concerns about sale of RMS Tasmanian forestry assets
New Forests is a vertically integrated forestry investment manager which manages plantations, forestry and processing infrastructure in Tasmania. The ACCC considers there are many circumstances where these commonly managed or advised funds may be motivated to act to each other’s mutual benefit. Note: The ACCC has published a statement of issues outlining its preliminary concerns. It invites submissions from interested parties by 10 October 2019 (26 September 2019).   More...

Full Federal Court confirms franchisor obligations in Ultra Tune appeal decision
In reducing the total penalty imposed on Ultra Tune to $2.014 million, the Court found that Ultra Tune’s breach of the sufficient detail requirement resulted from “egregious inadvertence” to its obligations. In January 2019, the Court found that Ultra Tune breached the Code and the Australian Consumer Law in its dealings with a prospective franchisee, including by making false and misleading representations (23 September 2019).   More...

Dieselgate closure in sight for Volkswagen as its agrees to terms with ACCC
Volkswagen Group Australia (VGA) is one step closer to putting the dieselgate affair behind it in this market with an announcement that it has reached in-principle settlement with the ACCC over claims by the consumer watchdog that the company engaged in misleading or deceptive conduct over diesel emissions claims (23 September 2019).  More...

ASIC wins court case against asset manager
The Federal Court of Australia has delivered judgment in ASIC’s favour in proceedings against Gallop International Group, Gallop Asset Management, Stumac and former director Ming-Chien Wang. Judge Charlesworth found GIG operated a financial services business without holding a financial services licence, published statements which were false and misleading and engaged in misleading and deceptive conduct (23 September 2019).   More...

Record $26.5m penalty and $56m repayment ordered against training college Empower Institute
The FCA found that Empower had engaged in a system of unconscionable conduct when it enrolled consumers in VET FEE-HELP funded courses, by marketing courses to consumers in remote communities, indigenous communities and low socio-economic areas, making false or misleading representations, using recruiters who were practically untrained and in some cases offering inducements such as free Google Chromebooks (20 September 2019).   More...

More trouble for iSignthis as regulatory crackdown hits its customers
A regulatory crackdown on high-risk financial products has hit customers of Australia's latest billion-dollar tech stock, iSignthis. The regulator obtained interim injunctions against the two brokers stating they engaged in conduct that was "misleading or deceptive, and/or unconscionable." (19 September 2019).  More...

BlueScope execs toured world trying to form carrot-stick cartel: ACCC claims
Senior BlueScope executives, including former general manager sales Jason Ellis, allegedly flew around the world meeting with the steel giant's competitors and distributors in an attempt to set up a cartel that would rig the prices of steel and create a massive windfall for the ASX-listed company (18 September 2019).  More...

'Second-class citizens': Union's Manly Fast Ferry claims allowed
The Maritime Union can lawfully claim the Manly Fast Ferry service treats its workers as "second-class citizens", a Federal Court judge has found. The NRMA had launched urgent court action asserting the union’s claims were misleading or deceptive but Justice Griffiths disagreed in a judgment delivered on Wednesday last week (17 September 2019).  More... 

Practice and regulation 

ACCC cartel immunity and cooperation policy effective on 1 October 2019
Under the revised policy, applicants seeking immunity will now be asked to enter into a cooperation agreement early in the immunity process, which will clearly set out the steps required for conditional civil and criminal immunity. The policy will also clarify a number of issues related to eligibility for immunity, the level of cooperation required, how information is used and confidentiality. The first party to report cartel conduct to the ACCC may be eligible for civil and criminal immunity. See the ACCC  cartel immunity and cooperation policy here

New Gift Card Laws
The Australian Consumer Law (ACL) has been amended to provide protections for gift card consumers across Australia. With some exemptions, the ACL will require minimum three year expiry periods for gift cards; require gift cards to display expiry dates; and ban most post purchase fees on gift cards. These changes apply to gift cards supplied to consumers on or after 1 November 2019. Further information can be found in the Explanatory Memorandum to the Treasury Laws Amendment (Gift Cards) Act 2018 and the Explanatory Statement to the Treasury Laws Amendment (Gift Card) Regulations 2018.

Current Senate Inquiries 2019 - Environment and Communications Legislation Committee
Competition and Consumer Amendment (Prevention of Exploitation of Indigenous Cultural Expressions) Bill 2019

ACCC Digital Platforms Inquiry reminder
The report contains 23 recommendations, spanning competition law, consumer protection, media regulation and privacy law, reflecting the intersection of issues arising from the growth of digital platforms. Before a detailed Government response is provided a further consultation process will take place. It will run for 12 weeks, after which the Government intends to release its response (by the end of 2019). Further details to follow on Digital Platforms page.

Cases

Australian Competition and Consumer Commission v Cornerstone Investment Aust Pty Ltd (in liq) (No 5) [2019] FCA 1544
CONSUMER LAW – contraventions of the Australian Consumer Law (ACL), being Sch 2 to the Competition and Consumer Act 2010 (Cth) – application for declarations, pecuniary penalties, a consumer redress order, compensatory orders and costs – systemic and individual breaches of the ACL – whether the second applicant suffered loss as a result of the contravening conduct
PRACTICE AND PROCEDURE – where applicants seek to withdraw undertaking not to enforce monetary orders against respondent in liquidation – whether undertaking precludes applicants from lodging proof of debt – undertaking varied
Competition and Consumer Act 2010 (Cth) Sch 2 ss 18, 21, 29, 74, 75, 76, 78, 79, 155, 224, 237, 239
Corporations Act 2001 (Cth) ss 471B, 500, 553B; Federal Court of Australia Act 1976 (Cth) s 53
Trade Practices Act 1974 (Cth) ss 45D(1), 52, 53(g), 82, 87

Australian Securities and Investments Commission v Gallop International Group Pty Ltd, in the matter of Gallop International Group Pty Ltd [2019] FCA 1514
CORPORATIONS –allegations that two companies contravened s 911A and s 1041H of the Corporations Act 2001 (Cth) and s 12DA and s 12DB(1)(e) of the Australian Securities and Investments Commission Act 2001 (Cth) – whether the companies conducted a business in this jurisdiction without holding an Australian Financial Services Licence – where financial services business promoted on two websites accessible in this jurisdiction – where websites remained accessible following the cancellation of each company’s licence – whether conduct of uploading accessible conduct to each website was attributable to both companies – whether representations accessible on website were false or misleading in contravention of s 12DB(1)(e) of the Australian Securities and Investments Commission Act 2001 (Cth) – whether continued conduct of financial services business by first defendant constituted misleading or deceptive conduct in contravention of s 12DA of the Australian Securities and Investments Commission Act 2001 (Cth) and s 1041H of the Corporations Act 2001 (Cth) – contraventions established against first defendant – no contraventions established against second defendant
CORPORATIONS – whether third defendant aided, abetted, counselled, procured or was otherwise knowingly concerned in the first defendants’ contraventions of s 12DB(1)(e) of the Australian Securities and Investments Commission Act 2001 (Cth) – nature and extent of involvement – assessment of pecuniary penalty
CORPORATIONS – whether second and fourth defendants should be wound up on just and equitable grounds where no contraventions established against them
CORPORATIONS – whether third defendant should be disqualified from managing corporations – whether third defendant should be permanently restrained from involvement in a financial services business in this jurisdiction
EVIDENCE – where defendants fail to appear at trial – where court satisfied the defendants are aware of the proceedings the orders sought against them – consideration of the inferences that may be drawn from the defendants’ failure to adduce evidence in respect of matters within their knowledge
Australian Securities and Investments Commission Act 2001 (Cth) ss 5, 12AC, 12BA, 12BB, 12DA, 12DB, 12GBA, 12GD, 12GH, 12GJ, 12GLD, 19, 77; Corporations Act 2001 (Cth) ss 9, 79, 206E, 461, 462, 464, 465A, 761A, 763A, 763B, 766A, 766C, 769B, 911A, 911D, 912A, 912D, 913B, 915B, 1041H, 1317QD, 1324; Trade Practices Act 1974 (Cth) s 86, Pt VI; Treasury Laws Amendment (Strengthening Corporate and Financial Sector Penalties) Act 2019 (Cth) Schs 1, 2; Federal Court (Corporations) Rules 2000 (Cth) r 5.11

Ultra Tune Australia Pty Ltd v Australian Competition and Consumer Commission [2019] FCAFC 164
CORPORATIONS – whether the appellant contravened cl 15(1)(b) of the Franchising Code (Schedule 1 to the Competition and Consumer (Industry Codes – Franchising) Regulation 2014) – ambiguity in cl 15(1)(b) – whether the disclosure documents provided sufficient detail regarding expenditure – no error found in appellant’s contravention of cl 15(1)(b)
PENALTY – appeal against penalty – number of contraventions – course of conduct and grouping of contraventions– totality – seriousness of contraventions – penalty reduced
Competition and Consumer (Industry Codes – Franchising) Regulation 2014 (Cth) cll 6(1), 8, 8(1), 8(2), 8(3), 8(4), 8(5), 8(6), 13, 15, 15(1), 15(1)(a), 15(1)(b), 15(1)(b)(ii), 15(1)(c), 15(1)(d), 16(1), 16(1)(b), 17(1)(a), 17(1)(c)
Competition and Consumer Act 2010 (Cth) s 76(1)

Australian Competition and Consumer Commission v BlueScope Steel Limited [2019] FCA 1532
PRACTICE AND PROCEDURE – suppression orders – principle of open justice – meaning of “necessary” in section 37AG(1) of the Federal Court of Australia Act 1976 (Cth) – where application for suppression order made in respect of originating application and concise statement – where civil proceeding commenced prior to commencement of related criminal proceeding – application dismissed proceeding involves alleged  cartel  conduct engaged in by BlueScope and Mr Ellis
Federal Court of Australia Act 1976 (Cth), ss 37AF, 37AG(1)(a); Federal Court Rules 2011 (Cth), r 2.32

Jafari v 23 Developments Pty Ltd [2019] VSCA 201
PARTNERSHIP – Existence – Nature of agreement – Whether partnership agreement entered into by parties – Agreement not consistent with intention to create a partnership – Intention to enter into profit sharing agreement only – Parties were not in a partnership.
CONTRACT – Termination or abandonment – Inability of proposed vendors to deliver clear title to purchasers as required pursuant to first agreement because mortgagee in possession appointed – New agreement between purchasers and mortgagee in possession – Whether first agreement abandoned or terminated because it could not be performed – Whether first agreement varied – No variation of first agreement – First agreement abandoned or terminated.
TRADE PRACTICES – Misleading or deceptive conduct – Whether representation as to ease with which properties could be decontaminated was misleading or deceptive – Causation – Whether respondents were induced by representation to purchase properties – Fair Trading Act 1999 (Vic) s 9 – Trade Practices Act 1974 (Cth) s 52.
EQUITY – Vendor’s lien – Whether holders of vendor’s lien entitled to interest – Matter not raised before trial judge – No basis for claim to interest.
EQUITY – Trusts –Whether unit trust created by applicant – Time of creation of unit trust by the applicant – Whether company held properties as trustee of unit trust before liquidation.

Disclaimer
The information in this publication is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, we do not guarantee that the information in this publication is accurate at the date it is received or that it will continue to be accurate in the future. We are not responsible for the information of any source to which a link is provided or reference is made and exclude all liability in connection with use of these sources.

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Howard Rapke

Howard Rapke

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Ian Robertson AO

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Paul Venus

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