In the media

Businesses lost an average of $10,000 to scams in 2016
Nearly 6000 businesses reported being targeted by scams in 2016 according to the Australian Competition and Consumer Commission’s Targeting Scams report, with losses totalling around $3.8 million, an increase of almost 31 per cent (19 May 2017).  More...

ACCC chairman Rod Sims to turn blowtorch on the Big 4 banks
The ACCC chairman says that its unprecedented new powers to probe and expose unexplained rates hikes could ­embarrass Australia’s big banks into finally doing the right thing for lenders. Mr Sims said the ACCC did not have the power to set price but could pursue through the courts anti-competitive or price fixing behaviour (19 May 2017).  More...

Harvey Norman Extended Warranty Providers face ACCC Court Enforceable Undertaking
The Australian Competition and Consumer Commission (ACCC) has accepted court enforceable undertakings from Domestic & General Services Pty Ltd and Yoogalu Pty Ltd (part of the Harvey Norman group of companies) following an industry-wide review (18 May 2017).  More...

United Dairyfarmers of Victoria gets good oil on unfair processor dealings
The ACCC agricultural commissioner Mick Keogh said the investigation had not reached a point where it could make a decision on milk swaps deals yet, but he said reports of this had come mostly from other dairy states and it was allegedly evident in Victoria as well. This included the balance of power and allocation of risk as well as the timing of price announcements, transparency and collective bargaining (16 May 2017).  More...

ACCC v Yazaki Corporation (No 3) [2017] FCA 465: Toyota Supplier Fined for Collusion
In the case of ACCC v Yazaki Corporation (No 3) [2017] FCA 465 (9 May 2017), the Federal Court has imposed penalties against Japanese company, Yazaki Corporation, for engaging in collusive conduct with a competitor when supplying wire harnesses to Toyota Motor Corporation (16 May 2017).  More...

Insurers give evidence during ESL public inquiry
NSW’s largest insurers have given evidence and answered questions on how they will ensure customers won’t be overcharged and will get the savings they are entitled to, when emergency services funding is removed from NSW home insurance policies on 1 July 2017.  Penalties up to $10 million may apply to insurers who charge unreasonably high prices or engage in false or misleading conduct (16 May 2017).  More...

Retrial granted over Cascade Coal payment to Eddie Obeid's family
An investor who lost $8 million in a mining company connected to former NSW Labor minister Eddie Obeid has been granted a retrial of his case against a company director. In today's appeal judgment, Justices John Gilmour and Richard White ordered a retrial of his misleading and deceptive conduct claim against Mr Duncan (16 May 2017).  More...

Yellow Pages has been caught out over automatic renewals for business customers
Australia’s publisher of Yellow Pages and White Pages, Sensis, has admitted it may have breached consumer laws by automatically renewing 12-month customer contracts without clearly telling them, and may have breached legislation on “misleading or deceptive conduct” and “false or misleading representations” (12 May 2017).  More...

E-cigarette companies to pay penalties
The Federal Court has ordered three online e-cigarette retailers The Joystick Company Pty Ltd, Social-Lites Pty Ltd and Elusion Australia Limited (in liquidation) to pay penalties for breaching the Australian Consumer Law (ACL) (08 May 2017).  More...

Faith in free markets dependent on stronger Competition and Consumer Act and high penalties for deterrence
Mr Sims said in essence, anti-competitive conduct is profit-maximising for firms, particularly those with a degree of market power. Mr Sims concluded by saying that to achieve deterrence, the penalties imposed by the Courts under the Competition and Consumer Act need to be many times higher than they are now for larger firms (06 May 2017).  More...

Ramsay Health Care: ACCC Takes Action over Alleged Abuse of Market Power
The Australian Competition and Consumer Commission (ACCC) has instituted proceedings in the Federal Court against Ramsay Health Care Australia Pty Limited (Ramsay) for alleged anti-competitive conduct involving misuse of market power and exclusive dealing in the Coffs Harbour (NSW) region (05 May 2017).  More...

In practice and courts, published reports

Penalty units increasing
Penalty units are set to increase from their current value of $180 to $210 from 1 July 2017. This follows recent penalty unit increases in 2012 ($110 to $170) and 2015 ($170 to $180).
The change was effected by the Crimes Amendment (Penalty Unit) Act 2017 (Act), passed by Federal Parliament on 11 May 2017. 
Most substantive offences in the CCA (which includes the Australian Consumer Law) are not set by reference to penalty units. The increase will, however, result in an increase to the amounts payable associated with:
penalties attaching to infringement notices under section 134C for breaches of various provisions of the Australian Consumer Law; and
a number of procedural offences, including a refusal or failure to comply with a request for information, documents or evidence issued by the ACCC, or giving false or misleading information or evidence in response to such a notice, under section 155.  Source: http://incompetition.com.au/

Fuel price board regulatory reform in Queensland
Under the proposed model, all fuel retailers must show only the full price of fuel available to all motorists, instead of displaying potentially misleading or confusing prices. The proposed start date for the change is 1 January 2018.
The proposed regulation (the Fair Trading (Fuel Price Board) Regulation 2017) will apply in addition to existing requirements under the Australian Consumer Law. The regulation’s based on existing laws in South Australia and Victoria. Submissions close 29 May 2017.  More...

The Big Chill”? A Comparative Analysis of Effects-Based Tests for Misuse of Market Power’ (2017)
Katharine's Kemp's new article on misuse of market power is now available as an advance copy from the UNSW Law Journal.  More...

Cases

Addenbrooke Pty Limited v Duncan (No 2) [2017] FCAFC 76
TRADE AND COMMERCE – appeal from the dismissal of a claim that the respondents had engaged in misleading or deceptive conduct – claim based on positive representations and, as against the first respondent, on the nondisclosure of certain matters – held, by majority, that trial Judge had not dealt with the whole of the appellant’s misleading or deceptive conduct case against the first respondent and, further, that it was not possible for the Full Court to determine the whole claim on the basis of the findings made by the trial Judge.
TRADE AND COMMERCE – trial Judge’s finding that the appellant had not proved that it had relied on the positive misrepresentations was not conclusive of the whole of the misleading or deceptive conduct claim given that it included a claim of nondisclosure – held, by majority, that there should be a retrial of this claim before a different Judge.
TRADE AND COMMERCE – appeal against the dismissal of the appellant's claim that the first respondent had engaged in unconscionable conduct upheld for the same reasons.
TRADE AND COMMERCE – appeal against dismissal of the claim that the first respondent was liable as an accessory to the misleading or deceptive or unconscionable conduct of another respondent – the appellant’s claim against that respondent, had, by consent, been dismissed before the trial – trial Judge did not deal with the contention of the first respondent that the dismissal meant that the appellant was estopped from pursuing the accessorial liability claim – held appropriate for this issue to be determined in the retrial.
EQUITY – claim that first respondent had knowingly assisted in the breach of a constructive trust said to have arisen when the appellant paid monies in compliance with the share subscription agreement said to have been induced by the alleged misleading or deceptive conduct – held that the constructive trust did not arise.
NEGLIGENCE – appellant’s claim that second and third respondents had breached a duty of care – trial Judge did not determine this claim – consideration of whether appellant and second respondent were in a continuing relationship of client and investment advisor – held that the respondents did not owe the duty of care alleged.
TRUSTS AND TRUSTEES – claim that the third respondent had breached a trust – claim not determined by trial Judge – held that a trust did not arise.
EVIDENCE – appeal against evidence ruling of the trial Judge – consideration of the Telecommunications (Interception and Access) Act 1979 (Cth) – appeal ground dismissed – Judge did not err in that a transcript of the intercepted communication was inadmissible.

Australian Competition and Consumer Commission v Australian Institute of Professional Education Pty Ltd (in liq) [2017] FCA 521 
CORPORATIONS – application for leave to proceed against a company in liquidation under s 500 of the Corporations Act 2001 (Cth) – proceedings alleging misleading, deceptive and unconscionable conduct against vocational education provider – principles applicable to exercise of discretion to grant leave to proceed – whether proceedings should remain stayed pending reconciliation of advance payments made to the company –whether public interest met by potential declarations in materially similar proceedings – where relief sought includes refund of substantial monies paid from public revenue and affects potential liabilities of numerous persons – where significant public interest in matter proceeding outweighs detriment to creditors.
CONSUMER LAW – representative case based on system of conduct or pattern of behaviour – where limited number of complainants – public interest in determination and enforcement of the standards prescribed by the Australian Consumer Law.
Competition and Consumer Act 2010 (Cth), sch 2, ss 18, 21, 29(1), 224, 239, 232, 246(2); Corporations Act 2001 (Cth), ss 471B, 500.

GAIN Capital UK Limited v Citigroup Inc (No 4) [2017] FCA 519
TRADE MARKS – appeal from decision of Registrar of Trade Marks to refuse application to register appellant’s trade marks – whether appellant’s trade marks are substantially identical with, or deceptively similar to, respondent’s registered trade marks in respect of similar services or closely related goods – whether respondent’s registered trade marks had acquired a reputation in Australia – whether because of that reputation appellant’s trade marks would be likely to deceive or cause confusion – whether the appellant intended to use or authorise the use of its trade marks – appeal allowed - Trade Marks Act 1995 (Cth) ss 7(1), 10, 44, 59, 60.  

Toucha Pty Ltd v Thomas Taylor (Bowls) Limited [2017] FCA 514
TRADE PRACTICES – misleading or deceptive conduct under s 51A and 52 of Trade Practices Act 1974 (Cth) – accessorial liability under s 75B of the Act – where applicant and first respondent entered into distribution agreement – where second respondent was managing director of first respondent – whether respondents represented to applicant that it would enter into new distribution agreement with applicant – alleged representations not established – application dismissed. Trade Practices Act 1974 (Cth) ss 51A, 52, 75B, 87. 

Colin R Price & Associates Pty Ltd v Four Oaks Pty Ltd [2017] FCAFC 75
TRADE PRACTICES – unconscionable conduct – director of unit holder under significant financial and emotional pressure – where document in effect required unitholder to give up its right to share in the proceeds of the project to pay for cost overruns – whether finding of unconscionable conduct should have been made – whether a claim of accessorial liability was sufficiently made and pressed – whether appropriate to make findings of accessorial liability on appeal.
TRADE PRACTICES – misleading or deceptive conduct – alleged representation that builder would be paid the cost of all materials and labour plus a margin of 15% – whether finding of misleading or deceptive conduct should have been made.
TRUSTS AND TRUSTEES – unit trust for property development project – whether claims against other beneficiaries sufficiently pleaded – whether beneficiary may bring proceedings in its own right – avoiding a multiplicity of proceedings – proper operation of s 22 of the Federal Court of Australia Act 1976 (Cth) – whether orders should have been made against all respondents – whether there was sufficient evidence of an amount paid by the trustee – whether any such amount was a proper payment for the purposes of the trust.
CORPORATIONS – agency – authority of single director to bind a company which has more than one director – whether finding that director did not have implied or ostensible authority should have been made.
PRACTICE AND PROCEDURE – evidence – whether it was appropriate to permit the parties to adduce further evidence after judgment on separate questions. 

Casenote: ACCC v Yazaki Corporation (No 2)
[2015] FCA 1304 (Federal Court of Australia, South Australian Registry)
[2017] FCA 465 (Penalties)
Claims: Cartel conduct (market sharing and price fixing)
The Federal Court found that Yazaki Corporation engaged in collusive conduct with its competitor when supplying wire harnesses to Toyota in Australia. The conduct took place in 2003 and 2008 and breached the exclusionary conduct provisions of the CCA and the Competition Code of Victoria. Penalty Penalties of $9.5m plus costs were awarded on 9 May 2017. 

Australian Competition and Consumer Commission v Yazaki Corporation (No 3) [2017] FCA 465
TRADE PRACTICES – Consideration of s 76 of the Competition and Consumer Act 2010 (Act) and appropriate penalty or penalties in respect of contraventions of s 45(2) – where contravener engaged in cartel conduct related to the supply of automobile parts – determination of maximum penalty – where parties have not sought to prove the value of the benefit reasonably attributable to the contraventions – where dispute as to the amount of annual turnover attributable to the contravener.
TRADE PRACTICES – Consideration of how many contraventions are subject to the maximum penalty – whether contraventions are to be considered as one act within s 76(1A)(b) of the Act – whether the contraventions are to be considered part of the same conduct within s 76(3) of the Act – where conduct can be divided into two broad categories of conduct with different qualities – where pecuniary penalty for the second course of conduct significantly lower to reflect degree of connection between all of the conduct.
STATUTORY INTERPRETATION – Consideration of term “enterprise” in s 76(5)(d) of the Act – where most natural meaning of the term ‘enterprise’ is business – whether supplies made by a subsidiary are made in connection with a business carried on by the contravener for the purposes of determining “annual turnover” in s 76(5) of the Act.
PRACTICE AND PROCEDURE – Where the covert cartel conduct was deliberate, sophisticated and devious – where only limited conduct connected to Australia – where conduct nonetheless bore upon substantial financial transactions between substantial corporations in Australia – where no previous contraventions of the Act – where no suggestion contravener voluntarily undertook compliance training programs – where it is unclear whether punishment imposed in foreign jurisdiction related to conduct the subject of the Australian proceedings.  

Guirguis Pty Ltd v Michel's Patisserie System Pty Ltd [2017] QCA 083
TRADE AND COMMERCE – COMPETITION, FAIR TRADING AND CONSUMER PROTECTION LEGISLATION – CONSUMER PROTECTION – MISLEADING OR DECEPTIVE CONDUCT OR FALSE REPRESENTATIONS – FALSE REPRESENTATIONS GENERALLY – where the first respondent granted a franchise to the first appellant to operate a “Michel’s Patisserie” business in Townsville – where the second appellants guaranteed the first appellant’s obligations under the franchise agreement – where the appellants claim they suffered loss and damage by entering into the agreements because of misleading conduct arising out of misrepresentations made and omissions to disclose certain events – where those representations were not included in a Deed of Prior Representations – whether the pleaded representations had been made – whether the pleaded representations should be characterised as “conduct that is misleading or deceptive or is likely to mislead or deceive” – whether a non-disclosure amounted to misleading conduct in the circumstances – whether the representations not included in the Deed of Prior Representations could later be relied upon.
APPEAL AND NEW TRIAL – APPEAL – GENERAL PRINCIPLES – INTERFERENCE WITH JUDGE'S FINDINGS OF FACT – FUNCTIONS OF APPELLATE COURT – WHERE FINDINGS BASED ON CREDIBILITY OF WITNESSES – NECESSITY FOR FINDING TO BE CLEARLY WRONG – where the primary judge made findings about credibility, and did so with reference to only part of the evidence – where the primary judge failed to take into account other evidence of reliance – where the primary judge erroneously concluded that the respondents were not obligated to disclose any of the events alleged by the appellant – where the primary judge made no findings about which, if any, of the representations had been made and whether those representations, or any of them, should be characterised as misleading – whether a retrial should be ordered.
APPEAL AND NEW TRIAL – PROCEDURE – QUEENSLAND – APPEAL COSTS FUND – POWER TO GRANT INDEMNITY CERTIFICATE – WHEN GRANTED – where the appeal succeeds on questions of law – where the error of law was made by the primary judge to which no party contributed – whether indemnity certificates should be granted under the Appeal Costs Fund Act. 

Papale v Wilmar Sugar Australia Ltd [2017] QSC 072
CONTRACTS – GENERAL CONTRACTUAL PRINCIPLES – CONSTRUCTION AND INTERPRETATION OF CONTRACTS – INTERPRETATION OF MISCELLANEOUS CONTRACTS AND OTHER MATTERS – IMPLIED TERMS – GENERALLY – where the plaintiffs contracted with the defendant miller to sell sugar cane for processing and export – where the market exporter could not meet supply commitments and was required to purchase further supply – where the defendant and market exporter agreed on a basis of distribution of the costs of increased supply amongst the plaintiffs – where those costs were passed onto the plaintiffs by the defendant – whether the defendant’s conduct was in breach of its agreements with the plaintiffs – whether the defendant’s conduct was in breach of an implied term of good faith.
TRADE AND COMMERCE – COMPETITION, FAIR TRADING AND CONSUMER PROTECTION LEGISLATION – CONSUMER PROTECTION – UNCONSCIONABLE CONDUCT – GENERALLY – whether the defendant engaged in unconscionable conduct in passing on the costs to the plaintiffs under their agreements. 

Konstandellos & Ors v Harplex Pty Ltd & Anor [2017] VSC 183
CONTRACT – Question of enforceability of judgment debt by the first defendant against the plaintiffs – Nature of agreement – Whether agreement between the plaintiffs and the first defendant enforceable – Extent to which extrinsic evidence is admissible as to the terms of agreement – Whether or not payment discharged the plaintiffs’ debt in full – No release of the balance of the judgment debt was intended – Part payment not good consideration for release of full amount of judgment debt.
CONTRACT – Effect of settlement agreement reached between the first defendant and fourth plaintiff – Plaintiffs jointly and severally liable for judgment debt – No evidence about the terms of the settlement agreement – Release of a single debtor releases all other joint debtors – Settlement agreement found to constitute a release of all plaintiffs – Associated Retailers Ltd v Toys Unlimited Pty Ltd and ors [2011] VSC 297; Walker v Bowry [1924] HCA 28; (1924) 35 CLR 48; Pollack v National Australia Bank [2002] FCAFC 55 referred to and followed.
TRADE PRACTICES – Whether first defendant engaged in misleading and deceptive conduct – Terms and scope of retainer – Whether solicitor acted in trade or commerce – Section 18 Australian Consumer Law – Dual Homes Pty Ltd v Moores Legal Pty Ltd and anor (2016) 306 FLR 227 and LT King Pty Ltd and anor v Besser and anor [2002] VSC 354; (2002) 172 FLR 140 referred to and followed.
NEGLIGENCE – Terms of retainer between plaintiffs and their solicitors – Whether there was a breach of retainer and/or duty of care on the part of solicitors.  

 

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, Brisbane
T: +71 7 3135 0613
E: paul.venus@holdingredlich.com

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