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Inside track: Competition & Consumer

15 September 2021

#Competition & Consumer Law

Inside track: Competition & Consumer

In the media

Stone & Wood revives Byron Bay labeling controversy
Stone & Wood’s use of a third-party brewery to facilitate its entry into the contemporary beer market has revived the contentious issue of transparency in labeling for beers made under contract. Alcohol labeling in Australia is governed by a raft of unrelated but interlocking regulatory requirements designed to protect consumers from a food safety perspective and false and misleading claims (09 September 2021).  More...

Bathroomware brand Nero admits to likely resale price maintenance
Bathroomware brand, Nero Bathrooms International Pty Ltd, trading as Nero Tapware, has admitted it was likely to have engaged in resale price maintenance by withholding supply of its products from a small independent building supplies retailer when that retailer failed to raise its advertised prices (08 September 2021).  More...

Allianz and AWP to pay $1.5m penalty over misleading sale of travel insurance
Insurance giant Allianz and its related arm AWP Australia (AWP) have been hit with a $1.5 million penalty by the Federal Court following misleading sales of travel insurance policies through Expedia websites, by failing to correctly state how premiums were calculated and allowing insurance to be sold to ineligible customers (07 September 2021).  More...

ASIC to go hard on super funds that overpromise
The Australian Securities and Investments Commission has fixed a regulatory anomaly which was unjustifiably hindering full AFSL-holders in delivering tax-exempt advice. Speaking at the AIST Superannuation Investment Conference, Jane Eccleston, ASIC senior executive leader for superannuation, said the regulator would act if it saw false, misleading or deceptive conduct in these disclosures (02 September 2021).  More...

Alex Gow Funerals pays penalty for allegedly misleading consumers on funeral pricing
Funeral services provider Alex Gow Proprietary Limited (Alex Gow Funerals) has paid a penalty of $13,320 after the ACCC issued it with an infringement notice for allegedly making a false and misleading representation about the price of its funeral services and the fees that consumers are required to pay (02 September 2021).  More...

Cases

Allergan Australia Pty Ltd v Self Care IP Holdings Pty Ltd [2021] FCAFC 163
TRADE MARKS – infringement claim pursuant to s 120 of the Trade Marks Act 1995 (Cth) – whether primary judge erred in concluding that the respondents did not infringe the appellant’s BOTOX mark by using PROTOX as a trade mark – whether primary judge erred in concluding that PROTOX was not deceptively similar to BOTOX – held that PROTOX is deceptively similar to BOTOX mark – infringement established
TRADE MARKS – infringement claim pursuant to s 120 of the Act – whether the respondents used the composite phrase “instant Botox® alternative” as a trade mark – whether “instant BOTOX® alternative” deceptively similar to appellant’s BOTOX marks – phrase was used as a trade mark – phrase was deceptively similar to BOTOX mark – whether comparative advertising “defence” under s 122(1)(d) of the Act available and established – meaning of “comparative advertising – whether “defences” under s 122(1)(b) and (c) and (e) of the Act available and established – discussion of the nature of s 122 “defences” – defences not made out – infringement established
CONSUMER LAW – misleading or deceptive conduct – performance characteristics, uses or benefits – representations as to period of time effect of treatment would last – whether the use by the respondents of the phrase “instant Botox® alternative”, assessed in context, conveyed a representation that the respondents’ Inhibox product would provide results which would, after treatment has ceased, last about as long as treatment with Botox – contraventions of s 18, s 29(1)(a) and s 29(1)(g) Australian Consumer Law, being Schedule 2 to the Competition and Consumer Act 2010 (Cth) established

Australian Securities and Investments Commission v Allianz Australia Insurance Limited [2021] FCA 1062
CORPORATIONS – misleading or deceptive conduct –financial products – insurance – allegation that defendants had misled insureds by making four discrete representations about the Integrated Product – where first defendant represented that the premium of the Integrated Product was calculated by reference to matters having no bearing on the calculation – where defendants represented that the Integrated product provided coverage for journeys which were not covered – where defendants represented that the Integrated product provided coverage for customers of a demographic who were not covered – where defendants represented that travel insurance covering medical expenses was an essential part of travel in circumstances where the Integrated Product did not cover medical expenses – where liability admitted
CORPORATIONS – misleading or deceptive conduct –financial products – insurance – penalty – principles relating to the determination of penalty ‑where parties are in agreement as to the appropriate range

Australian Competition and Consumer Commission v Phoenix Institute of Australia Pty Ltd (Subject to Deed of Company Arrangement) [2021] FCA 956
CONSUMER LAW – alleged contraventions of s 21 of the Australian Consumer Law – unconscionable conduct in trade or commerce in connection with the supply of goods or services – where the first respondent was a vocational education and training (VET) provider of online courses – whether respondents’ marketing and enrolment systems unconscionable – where marketing and enrolment systems targeted at vulnerable consumers – whether respondents’ purpose in marketing and enrolment systems was to maximise enrolments attracting VET FEE-HELP assistance payments so as to maximise revenue via the VET FEE-HELP assistance scheme – whether respondents displayed a callous indifference to consumers’ eligibility and suitability for the online courses – where consumers often denied a reasonable opportunity to withdraw from the online VET course before the census date for each unit of study had passed – where Brokers and Agents deployed without effective training, monitoring or control – where consumers offered “free” laptops and other inducements to enrol – where Agents made misrepresentations that the online courses were free or free until the consumer earned a particular amount – attribution of conduct of Brokers and Agents to respondents
CONSUMER LAW – alleged contraventions of ss 18 and 29 of the Australian Consumer Law – misleading or deceptive conduct in trade or commerce – where Phoenix through its Brokers and Agents engaged in false, misleading or deceptive conduct towards four individual consumers in representing that if consumers enrolled they would receive a free laptop and the online courses were free, or free until they earned a particular amount, in contravention of ss 18 and 29 – where Phoenix engaged in unconscionable conduct in connection with the supply of online VET courses to the individual consumers in contravention of s 21 of the Australian Consumer Law – attribution of conduct of Brokers and Agents to Phoenix
Australian Consumer Law (contained in Sch 2 to the Competition and Consumer Act 2010 (Cth)) ss 18, 20, 21, 22, 22A, 29, 224, 232, 239
Australian Securities and Investments Commission Act 2001 (Cth) ss 12CA, 12CB, 12CC
Competition and Consumer Act 2010 (Cth) ss 2, 4, 84, 139B, 155, Sch 2

Australian Competition and Consumer Commission v Employsure Pty Ltd (No 2) [2021] FCAFC 157
CONSUMER LAW – misleading or deceptive conduct and making false or misleading representations – whether appellate court should make declarations of contravention and grant injunctive relief – issue of injunctive relief remitted to primary judge - Competition and Consumer Act 2010 (Cth) Sch 2 (Australian Consumer Law) ss 18(1), 29(1)(b), 29(1)(h), 232
THE COURT ORDERS THAT: Employsure is, is affiliated with, or is endorsed by a government agency when, in fact, Employsure is a private company that has no affiliation with, and is not endorsed by, any government agency; and Employsure thereby: (a) Engaged in conduct which was misleading or deceptive, or likely to mislead or deceive, in contravention of s 18(1) of the Australian Consumer Law in Schedule 2 to the Competition and Consumer Act 2010 (Cth)

Lakomy v Accounting TEK Property Investment Pty Limited [2021] NSWSC 1152
CONTRACT – where a defendant company (the first party) executes a written instrument (subscription agreement) and delivers it to the plaintiff company (the second party) on conditions that the second party will not do anything with it unless it hears from the first party that it may and the first party is misled into signing it by the misrepresentation that it is “not a proper document” and nothing would happen if it were signed – HELD – subscription agreement not binding – CONTRACT – terms – implied term – whether the subscription agreement included an implied term that the first party would not have to pay unless an investor made funds available – HELD – term not to be implied as not necessary to give the subscription agreement business efficacy – CONTRACT – performance – breach – readiness, willingness and ability to perform – where the first party’s obligations to subscribe and pay for shares under the subscription agreement are interdependent with the second party’s obligations to pass certain resolutions, issue shares and deliver documents and the second party does not tender performance – HELD – the second party cannot assert breach by the first party of its obligations where the second party was not ready, willing and able to perform – the second party has no right to recover from the first party – CONTRACT – discharge/abandonment – where parties execute another contract in substitution for the subscription agreement – HELD – if the subscription agreement was binding, it was discharged – CONTRACT – damages – quantification of loss – where second party’s obligation was to issue shares in return for money – whether it sufficiently quantified its loss – HELD – if it were otherwise entitled to succeed, loss sufficiently quantified CONSUMER LAW – Competition and Consumer Act 2010 (Cth) s 139B, sch 2 ss 4(1), 18(1) – misrepresentations by the second party that the subscription agreement was “not a proper document”, that nothing would happen if the first party signed it and that the natural person making the misrepresentation would do nothing with it until he heard from the signatory – authority of the natural person making the misrepresentation – HELD – second party engaged in conduct that was misleading or deceptive or likely to mislead or deceive – appropriate to make a declaration EQUITY – estoppel – where subscription agreement is signed on common understanding or convention that the first party will not have to subscribe and pay for shares unless funds are obtained from an offshore investor – funds not obtained – second party seeks to enforce agreement – HELD – such conduct is an attempt unconscionably to depart from the common assumption or convention and the second party is estopped from so acting

Kumar v Sydney Western Realty Pty Ltd & Anor (No. 2) [2021] NSWDC 446
TRADE AND COMMERCE – misleading or deceptive conduct – advertisement by vendor’s agent for sale of residential property – advertisement refers to expected dual income stream from two buildings on property acquired under contract for sale, one of those buildings being a granny flat – doubt about the legality of use of building as a granny flat – whether the agent was aware of such doubt – whether opinion on rental misleading or deceptive for absence of qualification – whether vendor’s agent acted as a mere conduit – whether test for causation on statutory action the same as the test under common law TORT – professional negligence – conveyancing – omission by solicitor to advise purchaser that granny flat lacked necessary development consent from local council – content of duty of care – identification of risk of harm – whether solicitor failed to take reasonable precautions by omitting to advise client of ramifications of notice from local council that granny flat not habitable – whether factual causation – whether evidentiary onus upon solicitor to establish information could not have been obtained from local council DAMAGES – contributory negligence – apportionment EVIDENCE – whether Jones v Dunkel adverse inference should be drawn from failure of first defendant to call former employee as witness

Adani Abbot Point Terminal Pty Limited v Lake Vermont Resources Pty Limited & Ors [2021] QCA 187
TRADE AND COMMERCE – COMPETITION, FAIR TRADING AND CONSUMER PROTECTION LEGISLATION – CONSUMER PROTECTION – UNCONSCIONABLE CONDUCT – WHAT CONSTITUTES – where the respondents are the users of a coal terminal – where the appellant is the effective owner of the coal terminal – where the respondents have separate user agreements with the appellant concerning their use of the terminal – where a previous user paid the respondent to be relieved of its obligations – where charges payable by the existing users increased to account for the previous user’s exit – where the trial judge found that, in all the circumstances, the appellant had engaged in unconscionable conduct – whether the appellant’s conduct was unconscionable under s 21(1) of the Australian Consumer Law
CONTRACTS – GENERAL CONTRACTUAL PRINCIPLES – CONSTRUCTION AND INTERPRETATION OF CONTRACTS – where user agreements exist between the appellant, as the owner, and the respondents, as users, of a coal terminal – where the contract provides that the appellant must demonstrate that its charges are reasonable having regard to the efficient operation of the Terminal – where the trial judge found that the appellant had not made such a demonstration as the appellant had not demonstrated that the way the Terminal was operated was, itself, efficient – whether the appellant had made the relevant demonstration
CONTRACTS – GENERAL CONTRACTUAL PRINCIPLES – CONSTRUCTION AND INTERPRETATION OF CONTRACTS – where user agreements exist between the appellant, as the owner, and the respondents, as users, of a coal terminal – where the fourth respondent’s user agreement contains a clause which provides “… No other Access Holder Presenting Coal for Handling at the Terminal will be charged less than the User is charged at that time for a substantially similar commercial arrangement” – where the appellant charges another user less to handle its coal than it charges the fourth respondent – where the trial judge found that the appellants conduct was in breach of its contract with the fourth respondent – whether the trial judge’s interpretation was in error
Competition and Consumer Act 2010 Cth Australian Consumer Law s 21, s 22

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