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Inside track: Competition & Consumer

06 July 2021

#Competition & Consumer Law

Inside track: Competition & Consumer

In the media

Court finds Captain Cook College acted unconscionably and misled students
The Federal Court has found that Productivity Partners Pty Ltd, trading as Captain Cook College, engaged in a system of unconscionable conduct and made false or misleading representations to prospective students in relation to online diploma courses following contested proceedings (02 July 2021).  More...

Nine Entertainment pays penalties for alleged excessive payment surcharges
Six subsidiaries of Nine Entertainment Co have paid penalties totalling $159,840 after the ACCC issued them with 12 infringement notices for allegedly charging subscribers and advertisers excessive payment surcharges (02 July 2021).  More...

Charges brought against director of Club Culture
Victoria Renee Ingrid Larsen of Aberfoyle Park, SA, has been charged with two counts of exercising power as a director of a company while it was in liquidation and making a false or misleading statement in a document lodged with ASIC (30 June 2021).  More...

Hayne’s ‘norms of conduct’ could fall short
Among the issues that received broad support across the more than 130 lawyers, academics, industry bodies, financial services providers and other participants to the inquiry was the move to principles-based regulation, and the fact that principles “on their own” had the potential to create legal grey areas. These were to obey the law, and included not mislead or deceive, act fairly (30 June 2021).  More...

Sumo Power to pay $1.2 million for misleading electricity plans
The Federal Court has declared by consent that Sumo Power Pty Ltd made false or misleading representations in selling electricity plans to Victorian consumers and ordered it to pay $1.2 million in penalties, and to pay consumer redress to affected consumers (30 June 2021).  More...

Court dismisses ACCC case against NSW Ports
The Federal Court has dismissed the ACCC’s proceedings against NSW Ports Operations Hold Co Pty Ltd and its subsidiaries. This judgment provides an enormous hurdle for the Port of Newcastle to develop a container terminal to compete with Port Botany and Port Kembla, because of financial consequences arising from the Deeds. Less competition usually results in higher charges for businesses and consumers (29 June 2021).  More...

Unlicensed mortgage lender issued court orders
ASIC has moved to shut down an unlicensed mortgage lender, alleging misleading or deceptive conduct. ASIC said that in response to the coronavirus pandemic’s impact on the financial system and the potential for harm that this has created, it has implemented a set of pandemic-related enforcement priorities that guides its response to misconduct (28 June 2021).  More...

ASIC obtains Federal Court orders against Remedy Housing
ASIC has moved to shut down an unlicensed mortgage lender that appears to have been engaging with customers primarily from the Pacific Islander community in Australia and New Zealand. ASIC has alleged that the Defendants and Remedy Housing are making false or misleading representations regarding financial services and financial products that involve interest in land (25 June 2021).  More...

Grape Co Australia fined by ACCC for misleading consumers about fruit origins
A Victorian table grape trader has been fined close to $35,000 for claiming all of its grapes were handpicked on the company's family farm in Sunraysia (22 June 2021).  More...

Honda raises prices across most models, as fixed-pricing rolls out from July 1
Almost every Honda new car will be more expensive for Australian buyers when its new fixed-price business model is introduced. As part of the changes, from July 1, 2021 Honda will move to nationwide fixed pricing.
As previously reported expert analysts have noted a shift to fixed-price business models will likely lead to higher prices (22 June 2021).  More...

Cases

Australian Competition and Consumer Commission v Productivity Partners Pty Ltd (trading as Captain Cook College) (No 3) [2021] FCA 737
CONSUMER LAW – unconscionable conduct – statutory unconscionability under s 21 of the Australian Consumer Law – systemic unconscionability – meaning of unconscionability – unconscionable in all the circumstances – where a system weakened safeguards to consumers in order to increase enrolments at a vocational education and training (VET) college – where the system was compared to the system that existed prior to its implementation – where the college did not cancel the enrolment of consumers in online VET courses it had not had any contact with before the census date which triggered the payment of fees by the Commonwealth and a debt by the consumer to the Commonwealth – where numbers and revenue increased dramatically – where significant numbers and proportion of students had no contact with the college and gained no value from enrolment but incurred substantial debts
CONSUMER LAW – misleading and deceptive conduct and representations under s 18 and 28 of the Australian Consumer Law – misleading or deceptive conduct in trade or commerce – false or misleading representations about goods or services – where college provided online VET courses and engaged recruiters to market its courses direct to consumers – whether recruiters made misleading or deceptive representations to specific consumers – where free laptops offered as inducement to enrol – where true cost of enrolling misrepresented
CONSUMER LAW – unsolicited consumer agreements under ss 69, 78-79 of the Australian Consumer Law – whether enrolment of consumers in online VET courses was by way of “unsolicited consumer agreements” – whether consent was given by consumers – threshold for consent to receive documentation – unsolicited consumer agreements and certain requirements regarding the agreement and its contents – formation of unsolicited consumer agreement
CONSUMER LAW – “knowingly concerned” under s 224 of the Australian Consumer Law – requirements with regard to knowledge and participation – where the fourth respondent was COO of the second respondent, which owned all the shares in the first respondent, was also acting CEO of the first respondent – whether the fourth respondent was knowingly concerned in the conduct of the first respondent
CONSUMER LAW – conduct “on behalf of” a body corporate under s 139B of the Competition and Consumer Act 2010 (Cth) – whether knowledge and conduct of the fourth respondent to do with the first respondent, the college, including as its acting CEO is attributed to the second respondent of which he was COO – attribution of conduct of an officer or employee of a subsidiary to a parent company – whether conduct of external recruiters is attributed to the VET college – conduct of an authorised class

Capic v Ford Motor Company of Australia Pty Ltd [2021] FCA 715
CONSUMER LAW – representative proceedings – guarantee of acceptable quality in s 54 Australian Consumer Law – where 73,451 vehicles supplied in Australia with DPS6 dry dual clutch transmission – allegation transmission non-compliant with s 54 guarantee due to real risks of failure arising from four component and two architectural deficiencies – where failure manifests in range of undesirable symptoms including vehicle shudder – where Respondent introduced revised versions of three of four original components – where Respondent submitted some symptoms are ‘normal operating characteristics’ of the vehicles – where component deficiencies interrelated with transmission’s architecture ‑– where Applicant alleged transmission control module failure a safety issue
CONSUMER LAW – representative proceedings – CONSUMER LAW – where Respondent replaced failed components under warranty
CONSUMER LAW – representative proceedings –allegation of misleading or deceptive conduct based on implied representations arising from marketing of vehicles – where no link to knowledge of Respondent – where express representation alleged to be on Respondent’s website – where no evidence as to context of representation
EVIDENCE – REPRESENTATIVE PROCEEDINGS –DAMAGES –
PRACTICE AND PROCEDURE – where Respondent objected to Applicant’s reliance on certain documents discovered in US proceedings – where documents tendered at end of trial and not part of particularised case – whether reliance procedurally fair in light of notice given
Competition and Consumer Act 2010 (Cth) s 82, Sch 2 ss 2, 4, 7(e), 18, 33, 54, 59(1), 259, 271, 272, 273, 274

Australian Competition and Consumer Commission v Sumo Power Pty Ltd [2021] FCA 712
COMPETITION – penalties to be imposed for admitted contraventions of the Australian Consumer Law (ACL) at Schedule 2 of the Competition and Consumer Act 2010 (Cth) – where proposed declarations precisely identify contravening conduct and include a sufficient indication of how and why that conduct is a contravention of the ACL – where the relatively small size of the contravener is material
In the period from 4 June 2018 to 31 December 2018 (the Relevant Period), the respondent, in trade or commerce: (a) engaged in conduct that was misleading , deceptive and likely to mislead or deceive in contravention of s 18(1) of the Australian Consumer Law at Schedule 2 of the Competition and Consumer Act 2010 (Cth) (the ACL.

Ali v Australian Competition and Consumer Commission [2021] FCAFC 109
CONSUMER LAW – appeal from a decision of the primary judge that the appellants were knowingly concerned in contraventions of s 18 of the Australian Consumer Law – where representations made to prospective franchisees created the overall impression that franchisor intended to charge in a particular way – where overall impression was false and misleading as to the franchisor’s intentions as to the way it would charge –whether evidence of six franchisees could be extrapolated so as to find that representation was made to all prospective franchisees – appeal dismissed
CONSUMER LAW – appeal from a decision of the primary judge that the appellants were knowingly concerned in contraventions of s 21 of the Australian Consumer Law and contraventions of cl 6 of the Franchising Code of Conduct – where appellants were director and national franchising manager of company – whether company engaged in unconscionable conduct and did not act in good faith by its charging practices – where franchisees were charged in staged payments and told these payments would be for the set-up and fit-out of franchise – where payments were instead applied to meet general expenses of the company and pay commissions – whether evidence of six franchisees could be extrapolated to all prospective franchisees – whether primary judge could make findings of fact relied upon to find unconscionable conduct – whether a system of systematic dishonest conduct sufficient to establish unconscionability – whether finding of unconscionable conduct illogical – appeal dismissed
CONSUMER LAW – appeal from a decision of the primary judge that the appellants were liable to pecuniary penalties, injunctions, disqualification and redress – where penalties imposed exceeded single statutory maximum – whether appellants engaged in one system of conduct or a series of dealings with consumers – whether penalties were manifestly excessive – where primary judge ordered that a trust fund be created for consumer redress to be administered by an accountant under Court supervision – whether redress orders beyond power – whether quantum of funds to be contributed to redress fund arbitrary, inappropriate or manifestly excessive – whether disqualification orders were manifestly excessive – appeal dismissed
Competition and Consumer Act 2010 (Cth) ss 51ACB, 51ADB, 51AE
Competition and Consumer Act 2010 (Cth) Schedule 2 (Australian Consumer Law) ss 20–22, 29, 37, 224, 239–241, 243
Competition and Consumer (Industry Codes - Franchising) Regulation 2014 (Cth) Schedule 1 (Franchising Code of Conduct) cl 6

Delaney v Delaney [2021] VSC 365
CONTRACT – Heads of Agreement for sale of units and shares – whether concluded binding agreement or subject to more formal agreement – Category (iii) in Masters v Cameron considered – construction of provisions of the Heads of Agreement – whether uncertainty of provisions meant no concluded binding agreement and/or unenforceable – construction of clause that ‘it is proposed [that taxation and accounting implications] would be settled by [each party’s accountant] in a mutually beneficial taxation outcome’ – clause gave opportunity for accountants to agree a mutually beneficial outcome exercising independent judgment in good faith and not acting on direction of their clients or solely in the interests of their clients – no relevant uncertainty in provisions – concluded binding agreement.
MISLEADING CONDUCT – Competition and Consumer Law Act 2010 (Cth) sch 2 (‘Australian Consumer Law’) (s 18) (s 4) – representations as to turnover and profitability of business – whether representations made relate to future matters – alleged falsity of representations as to turnover and profit – pleading requirements – whether current representations made –whether representations false or misleading – no falsity established – many representations superseded by further information about turnover and profit.
EQUITY – unconscionable conduct – whether party under special disadvantage due to various factors – no special disadvantage established – in any event, no unconscientious advantage taken – party has independent legal and accounting advice.

Dessco Pty Ltd as Trustee for the Alexandria Superannuation Fund Trust t/as Vogue Signs v Davey (Building and Property) [2021] VCAT 664
Retail lease; claim for arrears of rent and outgoings and damages for breach of lease by landlord; tenant counterclaimed relying on different lease alleging landlord repudiated the lease, engaged in misleading and deceptive conduct and unconscionable conduct; Retail Leases Act 2003.

Barodawala v Perinparajah [2021] VSC 387
BANKRUPTCY AND INSOLVENCY – whether debt incurred by means of fraud – actual fraud – Power v Kenny [1977] WAR 87 applied – SJD Marketing Pty Ltd v Venn [2018] VCC 2129 distinguished – Chittick v Maxwell (1993) 118 ALR 728 distinguished – Bankruptcy Act 1996 (Cth) ss 82, 83, 153.
PRACTICE AND PROCEDURE – application to set aside warrant of execution – amounts in the warrant were erroneous – warrant issued irregularly – Supreme Court (General Civil Procedure) Rules 2015 (Vic) rr 68.02(1)(a), 68.02(3).
2 At trial, the plaintiff alleged the defendant, in her capacity as sole director of Sterco International Pty Ltd (ACN 118 837 924) (Sterco), was a person involved in Sterco’s misleading and deceptive conduct . The NSWSC gave judgment for the plaintiff in the sum of $127,591.90 and ordered the defendant pay the plaintiff’s costs (‘NSW judgment’). 

Legislation

Commonwealth

Competition and Consumer Amendment (Motor Vehicle Service and Repair Information Sharing Scheme) Act 2021
Assented 24 June 2021 - Act No. 54 of 2021
Division 1—Objects of Part and simplified outline
57AA The objects of this Part are to: (a) promote competition between Australian repairers of passenger and light goods motor vehicles and establish a fair playing field by mandating access, on fair and reasonable commercial terms, to information used to diagnose, repair, service, modify or dismantle scheme vehicles.

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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