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Inside track: Competition & Consumer Law

28 May 2019

#Competition & Consumer Law

Inside track: Competition & Consumer Law

In the media 

Appeal in laundry detergent cartel case unsuccessful
The Full Court of the Federal Court has dismissed the ACCC’s appeal against a ruling that there was insufficient evidence to find that PZ Cussons Australia (Cussons) engaged in cartel behaviour in the laundry detergent market (24 May 2019).  More...  

International competition regulators sign new competition framework
The ACCC has joined the International Competition Network’s ‘Framework on Competition Agency Procedures’ (CAP) alongside more than 60 other global agencies (24 May 2019).  More... 

Teeth whitening: Surging popularity brings issues to resolve
Some consumer websites and online retail marketplaces that ship to Australian consumers are selling teeth whitening products containing concentrations of whitening agents that exceed legal limits in Australia. Teeth whitening products are classed as cosmetic, and the ACCC and its partner state and territory consumer protection agencies that are responsible for monitoring misleading advertising of teeth whitening products and services (24 May 2019).  More...  

Kogan in Court for alleged false or misleading discount advertisements
The ACCC has instituted proceedings against Kogan Australia Pty Ltd (Kogan) in the Federal Court alleging that Kogan made false or misleading representations about a 10% discount promotion, in breach of the Australian Consumer Law (23 May 2019).  More... 

ASIC powers to protect borrowers from ‘poverty trap’
The corporate regulator’s new product intervention powers have been welcomed by the CEO of the Financial Rights Legal Centre, in the hope that they’ll protect borrowers from credit law evasion. The chief executive, Karen Cox,  expects ASIC’s new powers to better protect consumers from the provision of misleading or deceptive financial products by enabling the regulator to intervene before they are released to market (22 May 2019).  More... 

GSK and Novartis misled consumers with Voltaren Osteo Gel claims
The Federal Court has accepted admissions by GlaxoSmithKline Consumer Healthcare Australia Pty Ltd (GSK) and Novartis Consumer Health Australasia Pty Ltd (Novartis) that they breached the Australian Consumer Law by making false or misleading representations in the marketing of Voltaren Osteo Gel and Voltaren Emulgel pain relief products (17 May 2019).  More...   

TGA continues action against Peptide Clinics Australia for alleged advertising breaches
The Federal Court has granted leave to the Secretary of the Department of Health to continue court proceedings against Peptide Clinics Australia following the company's liquidation in March this year. The alleged breaches relate to inappropriate online advertisements for 'peptides' and other prescription-only products which must not be misleading under Australian law (17 May 2019).  More... 

Court dismisses ACCC's proceedings against Pacific National and Aurizon
ACCC Chair Rod Sims said Aurizon may have sought to maximise its sale price by entering into these transactions with its closest competitor, Pacific National, but the transactions will create huge, likely insurmountable, barriers to new entrants who may wish to enter the markets and compete with Pacific National.  More... 

Cases

De Belin v Australian Rugby League Commission Limited [2019] FCA 688
CONTRACTS – restraint of trade – where applicant is a professional rugby league player contracted by a club to play rugby league in the National Rugby League (NRL) Competition – where applicant licenced his name, image and reputation in his playing contract – where applicant charged with aggravated sexual assault in company – where applicant has pleaded not guilty but charges are not yet determined – where the applicant was automatically stood down from playing in the NRL Competition under a new rule automatically subjecting players charged with criminal offences punishable by a maximum penalty of 11 years to a “no-fault stand down condition” – where player stood down on full pay and permitted to continue to train with his club – whether the new rule was reasonably necessary to protect the legitimate interests of the respondents, having regard to the seriousness of the restraint imposed upon the player – where the evidence established a clear and present danger to the legitimate interests of the respondents – whether the new rule imposed an indefinite condition – whether the new rule operated in a relevantly retrospective way – where no opportunity for the applicant to make submissions or seek review of the application of the no-fault stand down condition – whether real danger of contempt of court if the NRL were to determine whether there had been a breach of the NRL Code of Conduct – application dismissed
TORTS – whether the imposition of the new rule constituted an unlawful interference with the applicant’s Playing Contract with his Club – whether the applicant had established any loss or damage as a result of the no-fault automatic stand down condition – where no intention established to induce or procure the interference in the Playing Contract – where the NRL Rules and interlocking contractual matrix provided that players are bound by the NRL Rules as amended from time to time
CONSUMER LAW – whether, before the new rule was adopted, the respondents had made misleading or deceptive statements in breach of s 18 of the Australian Consumer Law (ACL) – where the representations are not properly pleaded – whether any loss or damage established
CONSUMER LAW – whether, in imposing the new rule, the respondents engaged in unconscionable conduct contrary to s 21 of the ACL
Australian Consumer Law s 18, 21, 22

RRG Nominees Pty Ltd v Visible Temporary Fencing Australia Pty Ltd (No 4) [2019] FCA 686
CONSUMER LAW – claims of misleading or deceptive conduct contrary to s 18 of the Australian Consumer Law (ACL) and s 1041H of the Corporations Act 2001 (Cth) – claim that misrepresentations made by the Respondents induced the Applicants to invest in multiple companies associated with the Respondents – the companies subsequently wound up – whether each alleged misrepresentation was made and whether it was misleading or deceptive – whether the Respondents’ misrepresentations were relied upon by the Applicants in making their investments – whether the reliance on the misrepresentations caused the loss of the investments – contraventions of s 18 of the ACL and s 1041H of the Corporations Act made out – Applicants entitled to recover damages.
Australian Consumer Law ss 4, 18, 236; Australian Securities and Investments Commission Act 2001 (Cth) ss 12BAA, 12BAB; Competition and Consumer Act 2010 (Cth) ss 131A, 763A, 763B, 766A, 766B, 766C, 1041H, 1041I; Trade Practices Act 1974 (Cth) s 82(1); Misrepresentation Act 1972 (SA) s 7

Australian Competition and Consumer Commission v GlaxoSmithKline Consumer Healthcare Australia Pty Ltd [2019] FCA 676
CONSUMER LAW – where respondent sold identical gel under both the sub-brand names “Osteo-Gel” and “Emulgel” – whether respondent contravened the Australian Consumer Law by suggesting “Osteo Gel” was specifically formulated to treat osteoarthritis through revised packaging, as was admitted to in relation to earlier packaging and website representations – held: Onus of proving the disputed contraventions not discharged. Australian Consumer Law (contained in Sch 2 of the Competition and Consumer Act 2010 (Cth)) ss 18, 29(1)(g) and 33 

Sino Iron Pty Ltd v Mineralogy Pty Ltd [2019] FCA 675
CORPORATIONS - cross-vesting application - application to cross-vest Federal Court proceedings to the Supreme Court of Western Australia - where various extant proceedings in the Supreme Court of Western Australia relating to same project - whether potential overlap of issues - whether case management principles favour management by one court - whether more appropriate and in the interests of justice to transfer
Competition and Consumer Act 2010 (Cth) s 138C; Jurisdiction of Courts (Crossvesting) Act 1987 (Cth) ss 5(4), 5(5) 

Australian Competition and Consumer Commission v Pacific National Pty Limited (No 2) [2019] FCA 669
COMPETITION – acquisition involving Queensland rail terminal – Acacia Ridge Terminal including the Brisbane Multi User Terminal – access to terminal – acquisition producing vertical integration – discrimination against new entrants by vertically integrated operator – ability to discriminate – incentive to discriminate – reasonable perception of ability and incentive to discriminate – barriers to entry heightened by such acquisition – availability of alternative terminals – Brisbane Multimodal Terminal at Port of Brisbane – standard gauge terminal at Bromelton, Queensland – narrow gauge terminal at Tennyson, Queensland – Inland Rail Project – prospect of new entry – efficiencies from vertical integration – elimination of double marginalisation – intermodal and steel rail interstate linehaul services – market definition – defining market by reference to end users with no ready substitutable services for rail services – two economic conditions supporting definition by reference to end users – capacity to price discriminate amongst users – no capacity for profitable arbitrage – interstate market(s) – north-south interstate market – east-west interstate market – Queensland market – non-bulk steel – bulk steel – competition in the relevant market(s) – substantial lessening of competition – meaning of “likely” – real chance – standard of proof of counterfactual – contravention of s 50 of the Competition and Consumer Act 2010 (Cth) – undertaking proffered by the acquirer – terminal services subcontract – provisions having likely effect of substantial lessening of competition – comparison of factual and counterfactual scenarios – alternative causation case – contravention of s 45(2) of the Competition and Consumer Act 2010 (Cth)

DIF III – Global Co-Investment Fund LP v Babcock & Brown International Pty Limited [2019] NSWSC 527
EQUITY – Fiduciary relationships – Promoters –whether fiduciary relationship existed on basis of being promoter of commercial transaction – indicia of fiduciary relationships –Corporations Act 2001 (Cth) EQUITY– Remedies – equitable compensation – for breach of fiduciary duty MISLEADING AND DECEPTIVE CONDUCT – s 1041H of the Corporations Act 2001 (Cth) – s 12DA of ASIC Act 2001 (Cth) – representation – whether approval of investment constituted representation as to commerciality of investment – whether misleading and deceptive – whether representation constituted representation concerning a future matter – s 769C of Corporations Act 2001 (Cth) and s 12BB of ASIC Act 2001 (Cth) – whether there were reasonable grounds for making representation – evidential burden for establishing reasonable grounds – on whose behalf was representation made
MISLEADING AND DECEPTIVE CONDUCT – s 1041H of the Corporations Act 2001 (Cth) – s 12DA of ASIC Act 2001 (Cth) – silence – whether failure to disclose information constituted misleading and deceptive conduct – whether reasonable expectation that information would be disclosed
MISLEADING AND DECEPTIVE CONDUCT - s 1041H of the Corporations Act 2001 (Cth) – s 12DA of ASIC Act 2001 (Cth) – quantification of loss – Potts v Miller – time at which loss should be assessed – whether to account for subsequent events
MISLEADING AND DECEPTIVE CONDUCT - s 1041H of the Corporations Act 2001 (Cth) – s 12DA of ASIC Act 2001 (Cth) – defences – whether liability is excluded by agreements – whether contrary to public policy – whether void under s 12ED of ASIC Act 2001 (Cth) – whether to excuse under s 1318 of the Corporations Act 2001 (Cth) – whether relevant defendants are concurrent wrongdoers and as a consequence whether claims apportionable – discretion of court under statute to apportion based on responsibility for damage or loss – contributory negligence TORT – negligent misstatement – whether duty of care owed – whether existence of duty of care inconsistent with contract – features of relationship – scope of duty
CONTRACT – Implied terms – statute – whether warranties under s 12ED of ASIC Act 2001 (Cth) are implied – definition and characteristics of ‘small business’ – whether liability excluded by relevant agreements – whether clauses of relevant agreements void under s 12EB of ASIC Act 2001 (Cth) – whether conduct of relevant defendants constituted breach of express terms of agreement – meaning of ‘gross negligence’ INSURANCE – Liability insurance – professional indemnity insurance – notification – whether evidence of knowledge of facts or circumstances from which it might reasonably be concluded that claim would be made – application of s 54 of Insurance Contracts Act 1984 (Cth) – other express exclusions in policy INSURANCE – directors and officers – notification – whether claims made arise out of circumstances notified during policy period – s 54 of Insurance Contracts Act 1984 (Cth) – other express exclusions in policy

Gallop Reserve Pty Ltd v Matton Developments Pty Ltd & Anor [2019] QSC 113
CORPORATIONS – FINANCIAL SERVICES AND MARKETS – MARKET MISCONDUCT AND OTHER PROHIBITED CONDUCT – MISLEADING, DECEPTIVE OR UNCONSCIONABLE CONDUCT – where the plaintiff entered into an agreement to provide litigation funding to the first defendant – where the litigation settled with a substantial payment to the first defendant – where an earlier debt owed by the first defendant to a bank was assigned by deed to the plaintiff – where one director of the first defendant, Kenward, executed the Deed of Assignment on its behalf pursuant to a power of attorney – whether the plaintiff engaged in misleading and deceptive conduct or unconscionable conduct in relation to the execution of the Deed of Assignment
CORPORATIONS – where the second defendant alleges that the plaintiff knowingly assisted Kenward in breaches of fiduciary duties under ss 180 and 182–184 of the Corporations Act
CORPORATIONS – CHARGES – SECURITY INTERESTS

JA & JB Boyle Pty Ltd v Major Furnace Australia Pty Ltd [2019] QDC 75

TRADE AND COMMERCE – COMPETITION, FAIR TRADING AND CONSUMER PROTECTION LEGISLATION – CONSUMER PROTECTION – MISLEADING OR DECEPTIVE CONDUCT OR FALSE REPRESENTATIONS – where the plaintiff entered into a contract to purchase a cremator from the defendant – where the defendant made representations regarding performance and delivery time – whether the representations were misleading or deceptive – whether reasonable grounds existed for making the representations – whether the plaintiff relied on the representations
TRADE AND COMMERCE – COMPETITION, FAIR TRADING AND CONSUMER PROTECTION LEGISLATION – ENFORCEMENT AND REMEDIES – OTHER ORDERS OR RELIEF – RESCISSION OR RESTITUTION – where the plaintiff entered into the contract to purchase a cremator in preference to an alternative product – where the plaintiff communicated its desire to rescind the contract to the defendant – where the cremator is now worthless – where the defendant refused to retake possession – whether avoidance of the contract and repayment of the purchase price is the appropriate remedy.  Australian Consumer Law 2009 Cth s 4, s 18, s 29, s 236, s 237 and s 243 

Rozenblit v Vainer & Anor [2019] VSC 316
TRADE PRACTICES – Misleading or deceptive conduct – Plaintiff transferred shares as consideration for second defendant providing security for a loan – First defendant proposed and arranged the share transfer – First defendant failed to disclose that second defendant was entitled to retain the shares if he did not provide security – First defendant engaged in misleading or deceptive conduct – Second defendant was not involved in first defendant’s contravention – Australian Consumer Law s 18.
TRADE PRACTICES – Unconscionable conduct – Plaintiff was not under a special disadvantage or disability – First and second defendants did not engage in unconscionable conduct within the meaning of the unwritten law – First and second defendants engaged in unconscionable conduct by expropriating or retaining the plaintiff’s shares for no consideration – Australian Consumer Law ss 20 and 21 – Commercial Bank of Australia v Amadio [1983] HCA 14; (1983) 46 ALR 402; Australian Competition and Consumer Commission v C G Berbatis Holdings Pty Ltd [2000] FCA 2; (2000) 169 ALR 324.
RESTITUTION – Transfer of property – Plaintiff transferred shares under a mistake of fact – Total failure of consideration – Retention of shares by second defendant unjust in all of the circumstances.
REMEDIES – Damages - Shares retained by second defendant worthless – Company wound up – Nominal damages awarded.
EQUITY – Breach of fiduciary duty – Plaintiff and first defendant were shareholders and directors in a company – First defendant wound up that company and incorporated a new company – Plaintiff alleged that he had been improperly excluded from new company – Whether first defendant owed fiduciary obligations to plaintiff – Where parties alleged to be in ‘quasi-partnership’ – First defendant did not assume responsibility for interests of plaintiff – Contractual arrangements and company and trust structures inconsistent with fiduciary obligations – Plaintiff was not vulnerable to and did not rely on first defendant – First defendant did not owe fiduciary obligations to plaintiff – Ebrahimi v Westbourne Galleries Ltd [1973] AC 360; Brunninghausen v Glavanics [1999] NSWCA 199; (1999) 32 ACSR 294.
CONTRACT – Breach of contract – Parties entered into a series of agreements to govern the operation, management and structure of a company’s business – Breach of the terms of an earlier agreement alleged – Subsequent agreement superseded the earlier agreements – No breach of contract – Hillam v Iacullo [2015] NSWCA 196

Contacts:
Melbourne
Howard Rapke, Managing Partner, Melbourne
T: +61 3 9321 9752
E: howard.rapke@holdingredlich.com

Sydney
Ian Robertson, National Managing Partner
T: +61 2 8083 0401
E: ian.robertson@holdingredlich.com

Brisbane
Paul Venus, Managing Partner, Queensland
T: +71 7 3135 0613
E: paul.venus@holdingredlich.com

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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