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Inside track: Competition & Consumer

17 March 2021

#Competition & Consumer Law

Inside track: Competition & Consumer

In the media

Freedom Foods, Blue Diamond head to US arbitration
The Federal Court of Australia has rejected legal proceedings brought by Freedom Foods Group against Blue Diamond Growers and ruled the remaining proceedings must head to arbitration in the US. FFG countered, alleging misleading and deceptive conduct by Blue Diamond having not acted in good faith under the franchising code and unconscionable conduct in breach of Australian consumer law (10 March 2021).  More...

Visa undertakes to address competition concerns over debit card payments
The ACCC has accepted a court-enforceable undertaking from Visa AP (Australia) Pty Ltd and Visa Worldwide Pte Limited (together, Visa) in relation to concerns that Visa may have limited competition in relation to debit card acceptance through its dealings with large merchants (10 March 2021).  More...

Caravan park operation to pay $2.3m after losing High Court appeal
Companies operating a NSW Tweed River area caravan park have lost an appeal in the High Court after being ordered to pay more than $2.3 million in compensation plus interest to consumers relating to the sale of waterfront villas as “permanent residences”. In 2019, the Supreme Court found that the defendant companies had engaged in misleading and deceptive conduct and that all three defendants had engaged in unconscionable conduct (09 March 2021).  More...

Super fund accused of ‘deceptive’ insurance conduct
The corporate regulator has filed civil penalty proceedings against Statewide Superannuation, alleging it engaged in “misleading or deceptive correspondence” when 12,500 members were contacted about group insurance they supposedly held through the financial services provider (08 March 2021).  More...

Financial advice firm hit with $1.4m penalty
A financial advice firm and its sole director have been hit with a $1.4 million penalty for engaging in false and misleading conduct. These penalties follow the Federal Court’s 22 November 2019 judgment, which found that Dover engaged in false, misleading or deceptive conduct when it provided a Client Protection Policy to 19,402 clients (05 March 2021).  More...

Court finds Megasave and Gary Bourne misled prospective franchisees
The Federal Court has declared that Megasave Couriers Australia Pty Ltd (Megasave) breached the Australian Consumer Law by making false or misleading representations to prospective franchisees, in proceedings brought by the ACCC. Megasave’s sole director Gary Bourne admitted that he was knowingly concerned in the conduct (02 March 2021).  More...

ASIC to offer immunity for misconduct informers
The Australian Securities and Investments Commission will offer immunity to people who inform the regulator about misconduct they have engaged in with others and are prepared to co-operate on investigations and court action (01 March 2021).  More...

Practice and Regulation

ACCC Feedback: Choice and competition in internet search and web browsers
The ACCC is seeking submissions from consumers and industry participants about choice screens, which give users a choice of internet search services on mobiles and tablets, rather than a pre-selected search service, and about the supply of web browsers in Australia. The submissions to an issues paper, will inform an upcoming report on the impact of default settings and pre-installation of search services and web browsers on consumer choice and competition. Submissions to the issues paper close on 15 April 2021.  More...

Cases

Australian Securities and Investments Commission v TAL Life Limited (No 2) [2021] FCA 193
CORPORATIONS – misleading or deceptive conduct –financial products – insurance – allegation that insurer had misled insured by making representations about insurer’s right to delay the processing of the insured’s claim and to withhold benefits under the policy until the insured provided an executed authority enabling the insurer to obtain and access the insured’s medical records and Medicare and Pharmaceutical Benefits Scheme claims information – whether representation was made – whether representation was false or misleading – whether representation contravened s 1041H(1) of the Corporations Act 2001 (Cth) – whether representation contravened ss 12DA(1) and 12BD(1) of the Australian Securities and Investments Commission Act 2001 (Cth) – whether conduct was in connection with the supply of financial services – whether conduct was in relation to financial services – meaning of “financial services” – whether representation was made in connection with the issue of the policy – whether the process of claims handling is a service otherwise supplied in relation to the policy
INSURANCE – whether insurer breached the duty of utmost good faith under s 13 of the Insurance Contracts Act 1984 (Cth) – where insured made an innocent non-disclosure and insurer avoided the policy – where insurer did not give the insured any notice of the investigation into the validity of her policy and did not give her an opportunity to address the insurer’s concerns – where insurer alleged in policy avoidance letter that insured had breached her duty of good faith‑ – where insurer threatened in policy avoidance letter to seek recovery of amounts paid under the policy
HIGH COURT AND FEDERAL COURT – jurisdiction of the Federal Court – power to award declaratory relief – whether Australian Securities and Investments Commission lacks standing to seek declaratory relief for breach of s 13(2) of the Insurance Contracts Act 1984 (Cth)
CONSTITUTIONAL LAW – judicial power of the Commonwealth – requirement for a “matter” – whether there is a “matter” before the Court – where parties to insurance contract agreed in settlement deed that contract was avoided ab initio ‑– whether ASIC lacks standing to seek declaratory relief for breach of s 13(2) of the Insurance Contracts Act 1984 (Cth)
Australian Securities and Investments Commission Act 2001 (Cth) ss 8(1), 12BA(1), 12BAA(7), 12BAB, 12DA(1), 12DB(1)
Corporations Act 2001 (Cth) s 1041H(1); Federal Court of Australia Act 1976 (Cth) ss 5, 21, 23
Insurance Contracts Act 1984 (Cth) ss 13, 11A, 11B, 75A(1); Judiciary Act 1903 (Cth) s 78B

Freedom Foods Pty Ltd v Blue Diamond Growers [2021] FCA 172
ARBITRATION – international arbitration – arbitration agreement – application for stay of the proceeding pursuant to s 7(2) of the International Arbitration Act 1974 (Cth) – where the contract between the parties contained an arbitration agreement requiring disputes to be arbitrated in California – where the respondent sought a stay of the proceeding pursuant to s 7(2) – where the applicants contended that the arbitration agreement was invalid or of no effect by virtue of cl 21 of the Franchising Code of Conduct
CONSUMER LAW – franchise – Franchising Code of Conduct – where the first applicant and the respondent entered into a License Agreement for the manufacture, distribution and sale of certain almond milk products in Australia – whether the License Agreement constituted a “franchise agreement” for the purposes of the Franchising Code of Conduct
Competition and Consumer Act 2010 (Cth), Sch 2, Australian Consumer Law, ss 18, 21, 134; International Arbitration Act 1974 (Cth), ss 3, 7; Competition and Consumer (Industry Codes—Franchising) Regulation 2014 (Cth), Sch 1 

Australian Securities and Investments Commission v Dover Financial Advisers Pty Ltd (No 3) [2021] FCA 170
CONSUMER LAW – pecuniary penalty for infringement of s 12DB(1)(i) of the Australian Securities and Investments Commission Act 2001 (Cth) – appropriate approach to assessment of civil penalty – whether a single penalty is required to be imposed for each contravening act – the circumstances in which an aggregate penalty may be ordered for multiple contraventions – relevance of contrition to deterrence – relevance of damage to health and reputation
Australian Securities and Investments Commission Act 2001 (Cth) ss 12BG, 12DA(1), 12DB(1)(i), 12GBA
Competition and Consumer Act 2010 (Cth) s 76
Competition and Consumer Act 2010 (Cth) Schedule 2 (Australian Consumer Law) s 224
Corporations Act 2001 (Cth) ss 912A, 917D, 1041H(1)

Director, Consumer Affairs Victoria v Vic Solar Pty Ltd (No 3) [2021] FCA 171
CONSUMER LAW – declaratory relief – appropriate form of declaratory relief
Australian Consumer Law ss 18, 21, 29, 73, 74, 76, 78, 79, 84 and 86; Australian Consumer Law and Fair Trading Act 2012 (Vic) s 8; Competition and Consumer Act 2010 (Cth) s 131
Between June 2014 and December 2018, the First Respondent engaged in conduct, in trade or commerce, in contravention of ss 18 and 29(1)(e) of the Australian Consumer Law by reason that its agents distributed to consumers a Community Bulk Buy brochure that contained representations that purported to be testimonials in relation to the First Respondent’s solar PV systems and no evidence was adduced to prove that the representations were not false or misleading.
In the Liability Judgment I concluded that the pleading contained an unintended error and should have alleged a contravention of s 29(1)(h) (at [114]). Further, even if such a representation had been pleaded and found, it would have involved a contravention of s 29(1)(g), not 29(1)(h).Having regard to the above matters, it has been necessary to re-frame substantially the declarations proposed by the applicant into an appropriate form.

Ethicon Sarl v Gill [2021] FCAFC 29
CONSUMER LAW - defective goods - urogynaecological medical devices - whether primary judge erred in finding safety of devices not such as persons generally were entitled to expect - whether primary judge erred in finding devices not of merchantable or acceptable quality, or not reasonably fit for purpose within meaning of Trade Practices Act 1974 (Cth) or the Australian Consumer Law - whether primary judge erred in finding respondents’ damage caused by defect
CONSUMER LAW - misleading or deceptive conduct - information in connection with devices, instructions for use and marketing - whether primary judge erred in finding appellants engaged in misleading or deceptive conduct - whether primary judge erred in finding third respondent’s damage caused by misleading or deceptive conduct
NEGLIGENCE - medical devices - duty of care - whether primary judge erred in finding appellants breached duty of care - inadequate pre-market and post-market evaluations of safety of devices - inadequate warnings of material risks of devices - standard of care - breach - regulatory environment - causation - onus of proof - application of ss 5C and 5D of the Civil Liability Act 2002 (WA) and ss 51 and 52 of the Wrongs Act 1958 (Vic)
LIMITATION OF ACTIONS - whether primary judge erred in finding that first and third respondents’ claims in negligence were not statute barred - onus of proof - application of Limitation Act 1935 (WA) and ss 39(3) and (4) of Limitation Act 2005 (WA)
OTHER RELIEF - whether primary judge erred in granting injunction enjoining appellants from supplying, distributing, marketing or promoting devices in Australia without warning or advice

Ausipile Pty Ltd v Bothar Boring and Tunnelling (Australia) Pty Ltd [2021] QSC 39
CONTRACTS – BUILDING, ENGINEERING AND RELATED CONTRACTS – REMUNERATION – STATUTORY REGULATION OF ENTITLEMENT TO AND RECOVERY OF PROGRESS PAYMENTS – PAYMENT CLAIMS – where the respondent engaged the applicant under a subcontract agreement to construct and design a secant pile launch shaft – where the applicant applied for judgment pursuant to s 78(2)(a) of the Building Industry (Security of Payment) Act 2017 (Qld) to recover amounts owing under a payment claim – where the parties accept that the applicant is entitled to judgment unless the respondent can establish a defence
CONSUMER PROTECTION – MISLEADING OR DECEPTIVE CONDUCT OR FALSE REPRESENTATIONS – CHARACTER OR ATTRIBUTES OF CONDUCT OR REPRESENTATION – SILENCE AND NON-DISCLOSURE – where the applicant’s Operations Manager and the respondent’s Project Manager discussed defects in the secant piles – where there was a misunderstanding about whether the parties had agreed that the respondent would withhold further payment claims – where the respondent sent the applicant a letter saying that it would withhold further payment claims “as discussed” – where the applicant’s Operations Manager discussed the letter with its Commercial Manager – where the respondent had never previously provided payment schedules – where the applicant was silent in the face of the letter – whether the applicant’s silence was misleading or deceptive or likely to mislead or deceive
CONTRACTS – BUILDING, ENGINEERING AND RELATED CONTRACTS – REMUNERATION – STATUTORY REGULATION OF ENTITLEMENT TO AND RECOVERY OF PROGRESS PAYMENTS – OTHER MATTERS – where the respondent submits there was a variation in the payment due dates under the subcontract – where the respondent submits that, because of this variation, the applicant did not issue a warning notice within the timeframes stipulated by s 99 of the Building Industry (Security of Payment) Act 2017 (Qld) – where the subcontract, new supplier form, tax invoices and payment claims contained different payment due dates – where the respondent did not consistently make payments in accordance with any of these due dates – whether the payment terms under the subcontract were varied
CONTRACTS – BUILDING, ENGINEERING AND RELATED CONTRACTS – REMUNERATION – STATUTORY REGULATION OF ENTITLEMENT TO AND RECOVERY OF PROGRESS PAYMENTS – PAYMENT CLAIMS – where the respondent hired the applicant’s crawler crane in order to complete works under the head contract – where the applicant’s works under the subcontract had been completed – where the payment claim included a “variation” amount for the crawler crane hire – whether the payment claim contained claims in relation to two contracts – whether the payment claim was void
Building Industry Fairness (Security of Payment) Act 2017 Qld s 68, s 70, s 73, s 75, s 76, s 77, s 78, s 99, s 100
Competition and Consumer Act 2010 Cth Schedule 2, s 18, s 238
Queensland Building and Construction Commission Act 1991 Qld s 67U

Solar Panel Xpress Pty Ltd v Wallandale Pty Ltd & Ors [2021] QDC 31
GENERAL CONTRACTUAL PRINCIPLES – CONSTRUCTION AND INTERPRETATION OF CONTRACTS – where plaintiff contracted to purchase a business conducted by the first defendant – whether on the proper construction of the sale contract, the business sold included PV sales business component of the existing business – where the contract was intended to be entirely in writing – whether extrinsic facts may be considered to assist in construction– whether and to what extent post-contractual events assist in construction
CONTRACT - MISLEADING OR DECEPTIVE CONDUCT – where profit and loss statements were provided to the plaintiff in respect of the business offered for sale by the first defendant – where the profit and loss statements were prepared by the second defendant accountants – where the profit and loss statements included revenue and costs arising from both a 12V and RV sales business and a PV sales business – whether provision of the profit and loss statements and certain alleged oral statements related to them were misleading or deceptive – whether the second defendant accountants were liable for any misleading conduct alleged by the plaintiff where the statements were prepared in accordance with the accountant defendants’ retainer. Competition and Consumer Act 2010 Cth Schedule 2 - Australian Consumer Law, s 18

Euromark Limited v Smash Enterprise Pty Ltd & Ors [2021] VSC 97
CONTRACT – exclusive distribution agreement for UK region –construction of terms – express good faith obligation – express term that if customer in Region advises unwilling to deal with distributor, supplier in consultation with distributor reserves right to distribute products in Region – express terms on proper construction include obligation not to procure customer to be unwilling or to take steps to distribute products in Region without consultation with distributor – alternatively, similar term encompassed by good faith obligation – no implied term to that effect necessary.
CONTRACT – wrongful termination of distribution agreement for UK Region by supplier – breach by supplier of express terms including good faith obligation – wrongful termination then withdrawn by supplier with express statement of intention to be bound by agreement – whether express terms breached were essential entitling distributor to terminate – whether further breaches of express terms after wrongful termination withdrawn entitled distributor to terminate – right to terminate established.
CONTRACT – whether distribution agreement affirmed notwithstanding right to terminate – whether distributor had full knowledge of relevant breaches at time – whether distributor estopped from contending right to terminate – whether distributor’s right to terminate agreement waived - no affirmation, waiver or estoppel established.
CONTRACT – termination of distribution agreement by distributor – whether distributor reading willing and able to perform at relevant time – whether breach of express term that distributor would not sell products ‘so similar ... that they could be confused’ with supplier products in period before and at termination – whether breach of express term to promote product in Region in period before and at termination – proper construction of express terms – whether breaches of supplier meant distributor excused from performance of these terms – distributor excused from performance while supplier asserted agreement terminated and refused to supply products – distributor not ready willing and able to perform after purported termination withdrawn as it did not promote supplier products after that time and before distributor terminated agreement – whether affects validity of termination or right to claim loss of bargain damages – termination invalid – no loss of bargain damages.
MISLEADING CONDUCT – cCompetition and Consumer Law Act 2010 (Cth) sch 2 (‘Australian Consumer Law’) (s 18) – distribution agreement – whether withdrawal of termination by supplier with express statement of intention to be bound by it misleading – whether distributor relied on misleading conduct in deciding not to terminate the agreement earlier – no reliance established.
UNCONSCIONBLE CONDUCT – Competition and Consumer Law Act 2010 (Cth) sch 2 (‘Australian Consumer Law’) (s 21) – conduct ‘unconscionable in all the circumstances’ – exclusive distribution agreement for UK region – supplier took steps to distribute products directly in Region by contacting distributors customers directly – supplier encouraged or procured distributor’s customers to order directly from supplier – conduct also breach of distribution agreement including good faith obligation – whether s 21 satisfied – Whether director and employee of supplier engaged in or involved in unconscionable conduct – damages.

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