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Inside track: Competition & Consumer Law

26 November 2019

#Competition & Consumer Law

Inside track: Competition & Consumer Law

In the media

White Lady, Simplicity Funerals owner accused of price-gouging
Funeral giant InvoCare has been accused of charging fees for no service and gouging hundreds of dollars from bereaved Australian families (22 November 2019).  More... 

Banking royal commission leads to first conviction — Dover Financial boss Terry McMaster
The Australian Securities and Investments Commission (ASIC) has won its first case arising out of the banking and financial services royal commission. Failed firm Dover Financial Planning, and its sole director Terry McMaster, were convicted in the Federal Court of false and misleading conduct (22 November 2019).  More... 

Improving Australia’s productivity and consumer welfare
The ACCC says there needs to be greater recognition of the economic costs of allowing anti-competitive mergers. Markets only work when participants are well informed. If consumers are misled or deceived they will likely make inappropriate decisions and be worse off as a result (including  lack of appropriate regulation to curb monopoly pricing and  a lack of price transparency)( 21 November 2019).  More... 

Mesh-injured women win class action case
The landmark judgement, in which Justice Anna Katzmann found that the manufacturers and suppliers of the mesh had engaged in misleading conduct and negligence. ‘At all relevant times all the Ethicon devices had a defect, all such times all the devices were also unfit for purpose for which they were required,’ Justice Katzmann said (21 November 2019).  More... 

Former NAB branch manager sentenced for making false and misleading statements to NAB
Former Western Sydney NAB branch manager, Mathew Alwan, has been sentenced to 12 months imprisonment to be served by way of Intensive Corrections Order (ICO) for making false and misleading statements to NAB in relation to 24 home loan applications (19 November 2019).  More... 

Telstra to buy back debt of remote customers 'ripped off' by unaffordable plans
Telstra has pledged to buy back thousands of dollars in debt, improve credit checks, and discipline staff in an effort to rebuild trust with vulnerable customers who feel ripped off (19 November 2019).  More... 

Australia: Practical Guidance from the Myer case for Directors and Executives
Shareholders in listed companies may be entitled to recover damages for breaches of continuous disclosure obligations, and for misleading and deceptive conduct, upon the basis of "indirect market-based" causation, thereby avoiding the need to establish direct, personal reliance by the affected shareholder upon either the absence of appropriate disclosure, or that misleading and deceptive conduct (18 November 2019).  More... 

Politicians reject push to make Health Star Ratings mandatory amid customer confusion
Health Star Ratings will only remain on some eligible products, after state and federal ministers from Australia and New Zealand agreed to keep the system voluntary. Consumer group Choice had been pushing for the system to be on all processed and packaged foods, accusing food manufacturers of "gaming" the scheme by picking and choosing which products to put stars on (15 November 2019).  More... 

Not so noble trader ordered to pay $147,925 for misleading consumers
A Burleigh Waters man has been ordered to pay $147,925 by the Southport Magistrates Court (15 November 2019) after being investigated by the Office of Fair Trading for misleading consumers with a fictitious home deposit scheme (15 November 2019).  More... 

Concerns about Assa Abloy fire doors deal
The ACCC has preliminary concerns that Assa Abloy’s proposed acquisition of E Plus Building Products Pty Ltd would significantly reduce competition in the market for fire door cores. The ACCC’s preliminary view is that any new supplier would be unlikely to enter the market in time, and at a sufficient scale, to prevent price increases by a combined Assa Abloy-E Plus entity (14 November 2019).  More... 

Former Cancer Council Queensland employee accused of faking terminal diagnosis
A former Cancer Council Queensland employee has been accused of faking her terminal illness.
In a statement released by the organisation, it is alleged the woman “was engaging in misleading and deceptive conduct, making false representations that she had a terminal cancer diagnosis”. (13 November 2019).  More... 

Why Australia’s first securities class action judgment (sort of) cleared Myer
Myer is in the clear, sort of, after Australia’s first judicial ruling on a securities class action. It centred around allegations that Myer misled the market about its projected earnings. The court found Myer had been misleading, but that because shareholders didn’t believe it, it didn’t harm them. The ruling established important principles that will guide future judgments (13 November 2019).  More... 

Cases

Gill v Ethicon Sarl (No 5) [2019] FCA 1905
Last Updated: 22 November 2019 Summary statement
CONSUMER LAW — representative action — nine urogynaecological medical devices made from polypropylene intended for permanent implantation in the female pelvis — where manufactured by foreign corporations and supplied by local corporation in the same corporate group — where neither foreign corporation had a place of business in Australia but impugned conduct took place in Australia, whether foreign corporations can be found liable for contraventions of the Trade Practices Act 1974 (Cth) and the Australian Consumer Law — whether conduct of foreign corporations was “in trade or commerce” — whether foreign corporations were carrying on business in Australia
CONSUMER LAW — defective goods — whether at the time medical devices were supplied by the manufacturer they had a “defect” within the meaning of s 75AC of the Trade Practices Act 1974 (Cth) or a “safety defect” within the meaning of s 9 of the Australian Consumer Law in that “their safety [was] not such as persons generally are entitled to expect” — relevant circumstances — meaning of “the time they were supplied by the manufacturer” — “learned intermediary” doctrine — significance of supply of devices through “learned intermediaries” (here, surgeons or physicians) — where respondents failed to warn doctors or patients of certain risks or potential complications of which they were aware — extent of obligation to warn — where some warnings were misleading — whether manufacturers excused from liability with respect to risks or potential complications that should be known to medical practitioners or which they are able to discover for themselves — significance of CE marking — relevance of state of scientific knowledge at time of supply — whether state of scientific or technical knowledge at time of supply not such as to enable defects to be discovered — whether devices unfit for the purpose for which they were supplied or of unmerchantable quality — whether each applicant suffered injuries because of defect in device she received or by reason that device not reasonably fit for the purpose for which it was supplied — proper approach to determination of causation in defective goods claim — causal connection required by s 75AD(c)
CONSUMER LAW — misleading or deceptive conduct — medical devices — whether product information published by one or other respondent misleading or deceptive or likely to mislead or deceive consumers of medical devices about the safety and/or efficacy of the devices — whether loss or damage by conduct
NEGLIGENCE — product liability — medical devices — duty of care — content of duty owed by foreign manufacturers and local supplier to end users of medical devices — where known risk of significant injury, whether respondents breached their duties of care by failing to adequately evaluate the safety of the devices before and/or after they were released to market — extent of obligation to warn where products supplied through “learned intermediaries” — whether product information insufficient to inform consumers of potential risks
EVIDENCE — where Civil Liability Act 2002 (WA) renders inadmissible evidence of injured person as to what she would have done if tortfeasor had not been at fault, whether evidence of this nature nonetheless admissible in a court exercising federal jurisdiction — whether s 5C(3) of the Civil Liability Act picked up by Judiciary Act 1903 (Cth)
PRACTICE AND PROCEDURE — representative proceeding — consumer class action — where respondents’ conduct with respect to multiple products is impugned — whether applicants were capable of representing group members who had been supplied with different products
LIMITATION OF ACTIONS — Trade Practices Act 1974 (Cth), ss 74J, 75AO — burden of proof — times that causes of action arose — whether certain actions statute-barred — effect of long-stop provisions in ss 74J(3) and 75AO(2) — whether Limitation Act 1935 (WA) or Limitation Act 2005 (WA) applied to claim by applicant implanted with device before commencement of 2005 Act — whether common law actions statute-barred — whether leave should be granted to extend the periods of limitation
PRACTICE AND PROCEDURE — whether respondent required to plead that action statute-barred under ss 74J(3) and 75AO(2) — whether provisions were in fact pleaded when only raised against group members and not against applicant
DAMAGES — calculations of life expectancy — discount for vicissitudes — whether discounts for the ordinary vicissitudes of life should be made to damages for future out-of-pocket expenses or care/services — whether s 5D of the Civil Liability Act 2002 (WA) and s 52 of Wrongs Act 1958 (Vic) disturb principles in Watts v Rake [1960] HCA 58; (1960) 108 CLR 158 and Purkess v Crittenden [1965] HCA 34; (1965) 114 CLR 164 — whether under Trade Practices Act 1974 (Cth) and Wrongs Act 1958 (Vic) a 5% multiplier or discount rate applies to future out-of-pocket expenses and care/services or only to future economic loss — whether future services should be compensated at commercial rates
OTHER RELIEF — whether injunctive relief appropriate or of any utility — whether declaratory relief should be granted 

Adelaide Brighton Cement Limited, in the matter of Concrete Supply Pty Ltd v Concrete Supply Pty Ltd (Subject to Deed of Company Arrangement) (No 4) [2019] FCA 1846
CONTRACTS — where the plaintiff seeks to recover monies said to be owed to it for cement supplied over a period of approximately nine years — whether the plaintiff agreed to provide the first defendant with a discount or rebate in relation to the supply of cement
ESTOPPEL — whether the plaintiff is estopped from denying that it agreed to provide the first defendant with a discount or rebate in relation to the supply of cement — whether the first defendant had a genuine belief that it was entitled to a discount or rebate
CONSUMER LAW — whether the first defendant engaged in misleading or deceptive conduct in contravention of s 18 of the Australian Consumer Law (Sch 2 of the Competition and Consumer Act 2010 (Cth)) — whether the fourth to sixth defendants were involved in conduct which contravened s 18 — whether the first defendant’s silence was misleading or deceptive — whether the plaintiff is taken to have been aware of the true level of indebtedness of the first defendant by reason of the knowledge or conduct of one of the plaintiff’s employees
EQUITY — whether the first defendant held cement which was received but not paid for, and income generated using that cement, on trust for the plaintiff — whether the first defendant committed a breach of trust or fiduciary duty for which it must account to the plaintiff — whether the fourth to sixth defendants procured or knowingly assisted or benefitted from that breach
CORPORATIONS — whether the first defendant failed to maintain adequate books and records in contravention of s 286 of the Corporations Act 2001 (Cth) — whether a severe absence of records is required to demonstrate a contravention of s 286 or whether the failure to record a major liability is sufficient
CORPORATIONS — where the first defendant is subject to a deed of company arrangement — application under s 445D the Corporations Act to set aside the DOCA — whether the investigations conducted by the second and third defendants were inadequate — whether the second and third defendants ought to have sought an extension of the convening period — whether the second and third defendant’s second report to creditors contained false or misleading statements and/or material omissions within the meaning of s 445D(1)(a), (b) and (c) of the Corporations Act — whether the Court should exercise its discretion to terminate the DOCA — whether it is in the public interest that a liquidator be appointed to the first defendant
CORPORATIONS — application under s 447A of the Corporations Act to terminate or set aside the DOCA — where the plaintiff alleges that the DOCA is an abuse of Pt 5.3A of the Corporations Act
CORPORATIONS — application under ss 75-42 and 90-15 of Sch 2 of the Corporations Act for an order that the resolution that the first defendant execute the proposed DOCA, passed on the casting vote of the second defendant, be set aside — application under ss 75-43 and 90-15 of Sch 2 of the Corporations Act for an order that the resolution that the first defendant be placed into liquidation, defeated on the casting vote of the second defendant, be taken to be passed — whether the second defendant’s exercise of the casting vote was unreasonable — whether the second defendant failed to have regard to a number of relevant considerations

Luben Petkovski v Kai Yin Huang (No. 3) [2019] NSWSC 1566
UNCONSCIONABLE CONDUCT – causation of loss –findings in principal judgment that the defendant/first cross-claimant deprived of the opportunity to purchase three of six properties by the first cross-defendant’s misleading, deceptive and unconscionable conduct – wrongdoer deters an associate of the defendant/cross-claimants from sharing in the purchase of two of the six properties – on what basis should damages be assessed against the cross-defendants: on the basis that the cross-claimants would have purchased a single additional property or an additional three properties. 
TRUSTS AND TRUSTEES – reimbursement and indemnity under Trust Deeds for trustees’ trust-related expenditure – principal judgment makes a finding that the defendants/cross-claimants are trustees for the cross-defendants in the acquisition and development of certain properties – defendants/cross-claimants seek to set aside the Trust Deeds – defendants/cross claimants claim reimbursement and indemnity under the Trust Deeds for trustees’ trust-related expenditure – whether their expenditure is recoverable.

Smith v Opalite Industries Pty Ltd t/as Opalite Caravans [2019] NSWCATAP 271
CONSUMER LAW – misrepresentations in connection with the supply of a caravan and information recorded on its compliance plate – determination of factual matters adverse to the appellants – refusal of leave to appeal.

Southern Waste Resourceco Pty Ltd v Adelaide Hills Region Waste Management Authority (No. 3)[2019] SASC 192
TRADE AND COMMERCE - COMPETITION, FAIR TRADING AND CONSUMER PROTECTION LEGISLATION - CONSUMER PROTECTION - MISLEADING OR DECEPTIVE CONDUCT OR FALSE REPRESENTATIONS - MISLEADING OR DECEPTIVE CONDUCT GENERALLY - GENERALLY
Held: any costs award made against SWR in view of my dismissal of its claim should not be made on an indemnity basis. 

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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 newsletter is accurate at the date it is received or that it will continue to be accurate in the future.

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Howard Rapke

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