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Inside track: Competition & Consumer

20 January 2020

#Competition & Consumer Law

Inside track: Competition & Consumer

In the media

Health insurance rewards programs from GMHBA, Qantas, Medibank and more
Choice have serious concerns about the lack of disclosure and transparency from GMHBA around the cost of their rewards program. GMHBA uses the AIA Vitality program, and adds a fee for that program to members' health insurance premiums. CHOICE has asked the ACCC to investigate whether GMHBA's conduct is misleading and deceptive (17 January 2020).  More... 

Probiotics information online often inadequate, misleading
Most websites that provide information about probiotics are unreliable and often tout unproven health benefits, a new study finds. Researchers concluded that the vast majority were run by companies advertising products or news outlets that offered incomplete information, often leaving out potential side effects, according to the report in Frontiers in Medicine (16 January 2020).  More... 

Gold Coast motor dealer back in court for warranty issues
A Labrador motor dealer has been fined $1,000 in the Southport Magistrates Court on 13 January 2020 for making misleading claims to a consumer about a vehicle's warranty (14 January 2020).  More... 

4WD Supacentre pays $63,000 for alleged misleading 'was/now' pricing
Outdoor Supacentre Pty Ltd, trading as 4WD Supacentre, has paid $63,000 in penalties after the ACCC issued it with five infringement notices for allegedly misleading consumers about ‘was/now’ price comparisons advertised on its website (14 January 2020).  More... 

RMBL Agrees to Settlement in Litigation Lending Services Class Action

Litigation Lending Services has been funding a Maurice Blackburn-led class action against mortgage lender RMBL Investments, for alleged breach of contract and misleading and deceptive conduct regarding collection charges the company enforced on borrowers (14 January 2020). More... 

Vocus coughs up $35 million to settle class action
Vocus has coughed up $35 million to settle a nagging class action from disgruntled shareholders over the company’s earnings collapse in 2017, in proceedings in the Federal Court of Australia claiming there was a reasonable basis to believe that Vocus engaged in misleading or deceptive conduct (08 January 2020).  More... 

Domino's to be served with fresh Federal Court claim by franchisee
Brisbane-based Domino's Pizza Enterprises and its high-profile managing director Don Meij will soon be served with a claim in the Federal Court by one of their long-term franchisees. Ultimately White alleges that Domino's and Meij engaged in false and misleading conduct, unconscionable behaviour, misuse of market power, exploited its bargaining power and breached the franchise code of conduct by failing to act in good faith (07 December 2020).  More...

How to ensure properties are asbestos-free
The government regularly maintains what it calls the ‘Misrepresentation guidelines’, which help real estate agents better understand their legal obligations around misrepresenting properties for sale. Section 18 of the Australian Consumer Law deals with the issue of misleading or deceptive conduct, and section 30 of the Australian Consumer Law deals with false or misleading representations about the sale of land. Section 52 of the Property, Stock and Business Agents Act 2002 covers misrepresentation by a licensee or registered person (30 December 2019).  More... 

Court orders Volkswagen to pay record $125 million in penalties
The Federal Court has ordered Volkswagen AG to pay $125 million in penalties, after it declared by consent that Volkswagen breached the Australian Consumer Law by making false representations about compliance with Australian diesel emissions standards (20 December 2019).  More... 

Agents warned against false advertising
The Victorian Government is putting estate agents on notice for using doctored photos in advertisements, warning that they can be false and misleading representations. Under the Australian Consumer Law, it is unlawful for estate agents to make false or misleading representations about the price, location, characteristics, and available facilities when advertising a property (20 December 2019).  More...

Practice and regulation

NSW Fair Trading: Egg labelling
The Commonwealth Government has introduced an Information Standard under the Australian Consumer Law (ACL) for all egg producers that prescribes their obligations when promoting or selling free range eggs (16 January 2020).  More... 

ACCC discussion paper:  ocean liner shipping class exemption
The ACCC is seeking comments on a possible class exemption from competition laws for liner shipping. A discussion paper has been released and submissions may be made until 28 February 2020. See ACCC, ‘Ocean liner shipping class exemption’ (class exemption register) and ACCC discussion paper - Ocean liner shipping class exemption

Cases

Australian Competition and Consumer Commission v Volkswagen Aktiengesellschaft [2019] FCA 2166
CONSUMER LAW – Volkswagen and Audi dieselgate scandal – admitted contraventions of s 29(1)(a) of the Australian Consumer Law (ACL) by Volkswagen Aktiengesellschaft – two regulatory proceedings settled as between the regulator, Australian Competition and Consumer Commission, and Volkswagen, its subsidiaries and affiliates – whether the agreed pecuniary penalty is appropriate within the meaning of s 224(1) of the ACL and having regard to all relevant circumstances – consideration of relevant matters in determining the amount of the requisite pecuniary penalty – agreed penalty held to be manifestly inadequate and not appropriate – higher penalty imposed – whether declarations substantially in accordance with the parties’ settlement should be made – whether agreed costs order should be made. Price fixing arrangements

Commissioner for Fair Trading v Jonval Builders Pty Ltd [2019] NSWSC 1893
CONSUMER LAW – Australian Consumer Law and Fair Trading Act –  misleading  or  deceptive conduct  – unconscionable conduct – sale of “movable” and “immovable” dwellings affixed to a site – sites approved for short-term occupation only – purchased after representations as to “permanent living” for retirees – analysis of provisions – factual summary – orders to be made for declarations and compensation – leave to apply for injunctions if conduct were to continue – plaintiff directed to file orders to reflect reasons
Australian Consumer Law (NSW), ss 3, 18 and 21, 232, 237, 239(1)(a)(i), 239(2)(a), 243(d)
Competition and Consumer Act 2010 (Cth), Sch 2, ss 140B and 140K
Fair Trading Act 1987 (NSW), ss 27, 28, 42, 43, 65, 72

Almona Pty Ltd v Parklea Corporation Pty Ltd [2019] NSWSC 1868
LAND LAW — Torrens title — Exceptions to indefeasibility — Fraud — Allegations of fraud of mortgagee — Concepts of statutory fraud and breach of equitable duty of good faith distinguished — Where fraud case put on materially similar factual basis as breach of good faith case — No basis for finding of fraud or relevant dishonesty except as to the words and conduct of mortgagee which resulted in the mortgagor losing the chance to obtain $4.25 million by the payment of the higher of two purchase prices in the contract for sale — In circumstances where it would not be proper for the Court to speculate and treat a ground for suspicion regarding the joint venture negotiations as a proper basis for a finding of fraud
CONTRACTS —  Misleading  conduct under s 18 of the ACL and s 12DA of the ASIC Act —  Misleading  or  deceptive conduct  — Silence — Circumstances in which silence can constitute  misleading  or  deceptive conduct — Misleading  or  deceptive conduct  found because the mortgagee had a general duty to exercise the power of sale in good faith, which imposed a positive duty to inform the mortgagor of the extra $4.25 million — Whether purchaser has accessorial liability for involvement in such conduct
CONTRACTS — Unconscionable conduct under statute — Failure of mortgagee to inform mortgagor of extra $4.25 million was unconscionable in the relevant sense, because in this respect the mortgagor was vulnerable and good conscience required disclosure — Purchaser a person involved in such conduct for reasons equivalent to finding of participation in mortgagee’s fraud
Competition and Consumer Act 2010 (Cth), Schedule 2; Trade Practices Act 1974 (Cth)

Ireland v WG Riverview Pty Ltd [2019] NSWCA 307
TRADE PRACTICES – misleading or deceptive conduct – sale of bull – auction catalogue – incorrect description of bull’s sire – disclaimer by vendor of correctness of information included in auction catalogue – proper characterisation of misleading or deceptive conduct – whether statement as to bull’s sire was one of fact or belief  
TRADE PRACTICES – damages for misleading or deceptive conduct – damages awarded for difference between stud and commercial cattle value of subject bull’s progeny – whether primary judge awarded damages for expectation loss 

Kaji Australia Pty Ltd v Glover (No. 4) [2019] NSWSC 1779
LAND LAW – possession of land – claim for possession and judgment for the amount owing under a loan agreement and mortgage – short-term loan pending approval of long-term finance - where the borrower had failed to repay the loan pursuant to the loan agreement – lenders entitled to possession and amount owing under loan agreement – parties instructed to bring in short minutes to quantify sum owing  
CONSUMER LAW – unconscionability – where the borrower claimed that the loan agreement was unconscionable either under the general law or statute – where the borrower claimed that the lenders should have requested proof of income – where the borrower claimed that a third party was exerting undue influence over him to the knowledge of the lenders – where the borrower claimed that he did not receive adequate independent advice about the loan agreement – where the borrower claimed that the loan was improvident because there was no effective exit strategy - no finding of unconscionability  
CONTRACT – unjust contract – whether the loan agreement was unjust pursuant to the Contracts Review Act 1980 (NSW) – where the borrower was aware at all times of the interest rates being charged – where the borrower understood the risks of entering into the mortgage – no evidence that the interest rates were unreasonably high or not reasonably necessary for the protection of the plaintiffs – contract not unjust  
CONSUMER LAW – misleading or deceptive conduct – s 18 Australian Consumer Law (Cth) – whether a cross-defendant made misleading or deceptive representations about a prospective loan – whether representor was a mere conduit for information provided by another - no evidence to support a finding that any such representation as pleaded was made – no misleading or deceptive conduct found   TORT – fraud – whether the cross-defendant engaged in a fraud on the borrower and conspired with others to enrich themselves through the sale of the borrower’s property – no evidence whatsoever to support the assertion of fraud nor the assertion of conspiracy

Snowden v Australian Mortgage Assist Pty Ltd [2019] NSWSC 1799
CONTRACTS – Misleading conduct under statute – Misleading or deceptive conduct – section 18 of the Australian Consumer Law – whether representations were made – inadequacy and unreliability of plaintiffs’ evidence – relevant events occurred many years ago – errors evident in evidence of both plaintiffs – plaintiffs’ evidence contradicted by relevant documents and other evidence – plaintiffs’ evidence not accepted unless corroborated by documents or objective facts – plaintiffs’ evidence clearly based on discussion and agreement between themselves rather than independent recollection – plaintiffs’ perceptions of what was said – how alleged representations should be objectively understood – plaintiffs’ evidence not accepted except to extent that it involves admissions or is inherently probable
CONTRACTS – Misleading conduct under statute – Misleading or deceptive conduct – section 18 of the Australian Consumer Law – whether representations were misleading or deceptive – section 4 of the Australian Consumer Law – whether representations were with respect to future matters –– whether there were reasonable grounds for representations – evidence required to be adduced by representor
CONTRACTS – Misleading conduct under statute – Misleading or deceptive conduct – section 18 of the Australian Consumer Law – reliance on alleged representations – whether representations were relied on – calculation of loss – appropriate method for assessing loss – Potts v Miller – whether circumstances that brought about loss can be considered as arising from alleged wrongful conduct or whether loss is extrinsic to that conduct – inadequate evidence from plaintiffs
TORT – Negligence – Duty of Care – whether relationship was one which gave rise to duty to take reasonable care to give investment advice – consideration of ‘salient features’ and circumstances of relationship – vulnerability – reasonable reliance – application of section 5H of the Civil Liability Act 2002 (NSW) – whether risk associated with investments could be considered ‘obvious risk’ under section 5F of Civil Liability Act 2002 (NSW)
EQUITY – Fiduciary relationships – Hospital Products Ltd v United States Surgical Corporation applied – whether fiduciary relationship existed between mortgage broker and clients – fiduciary duties – proscriptive fiduciary duties only – no positive duty to act in plaintiffs’ best interests
EMPLOYMENT AND AGENCY – employment – whether relationship of employer and employee – consideration of circumstances and features of relationship – indicia of relationship of employment – agency – consideration of circumstances and features of relationship – indicia of agency relationship – whether principal liable for conduct of agent

Ireland v WG Riverview Pty Ltd [2019] NSWCA 307
TRADE PRACTICES – misleading or deceptive conduct – sale of bull – auction catalogue – incorrect description of bull’s sire – disclaimer by vendor of correctness of information included in auction catalogue – proper characterisation of misleading or deceptive conduct – whether statement as to bull’s sire was one of fact or belief  
TRADE PRACTICES – damages for misleading or deceptive conduct – damages awarded for difference between stud and commercial cattle value of subject bull’s progeny – whether primary judge awarded damages for expectation loss

Legislation

Commonwealth

Regulation

Competition and Consumer (Price Monitoring—Petroleum Fuels) Direction 2019
18/12/2019 - This instrument requires the Australian Competition and Consumer Commission to monitor the prices, costs and profits relating to the supply of goods or services by persons in specified industries. These specified industries are involved in the supply of petroleum fuels, or in the supply of services related to the supply of petroleum fuels.

Acts

Communications Legislation Amendment (Deregulation and Other Measures) Act 2019
18/12/2019 - Act No. 120 of 2019
Amends the: Competition and Consumer Act 2010 and Telecommunications Act 1997 to amend the statutory information collection powers of the ACMA and the ACCC

Bills

Treasury Amendment (Prohibiting Energy Market Misconduct) Bill 2019
Assent  Act  no: 115 Year: 2019 10 December 2019
Amends the Competition and Consumer Act 2010 to: prohibit certain conduct in electricity retail, contract and wholesale markets, broadly relating to retail pricing, financial contract market liquidity and conduct in wholesale spot markets; provide powers and remedies which the ACCC may use if it reasonably believes a corporation has engaged, or is engaging, in prohibited conduct in the electricity sector; enable the Treasurer, following the receipt of a prohibited conduct recommendation from the ACCC, to issue a written order to a corporation or another body to make offers to enter into electricity financial contracts with third party entities; enable the Treasurer, following the receipt of a prohibited conduct recommendation from the ACCC, to apply to the Federal Court (the court) for a divestiture order and for the court to make related orders that a corporation or another body corporate dispose of interests in securities or assets that are part of its electricity business; set out the notice and recommendation procedures that must be followed before an order can be made in respect of a corporation or another body corporate; confer new compulsory information gathering powers on the Australian Energy Regulator (AER); allow the AER to share information with other agencies; and facilitate the conferral of functions related to the regulation of retail electricity prices on the AER.

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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