Consumer Protection Law

CONSUMER PROTECTION LAW

SUMMARY

PX SOLUTIONS

Sources used 2

APPLICATION OF THE TPA 9

Is the D a constitutional corp? 9

Is R a trading corp? 10

Is R a financial corp? 10

Does D fall under the extended application of Pts IVA (UC), V, VB? 11

Is D a natural person to whom s6(3) applies? – unconscionable conduct + unfair practises offences only 11

Use of particular services 11

SHIELD OF THE CROWN 13

In right of the Commonwealth 13

Is the activity specifically excluded under s 2C? 13

Is Cth carrying on a business? 13

In right of a State or territory 14

Is respondent part of the crown in right of a State or territory? 15

Is respondent a third party contracting with a GBE? 15

IS THE CONDUCT IN TRADE OR COMMERCE? 16

Narrow view - authoritative 16

Wide view (not law) 16

Special cases 17

Sales of private assets 17

Sale of part of a business 17

One-off sale of capital asset by business 17

Employment Negotiations 18

Wilcox J’s view 18

Heerey J’s view 19

Representations in lectures subsequently sold 19

Professional activity 20

Government announcements and policy statements 20

Statements to Public 20

Internal corporate communications 21

ANCILLIARY LIABILITY 23

Imputed Conduct 23

Imputed to corporation 23

Imputed to natural person 24

Is there actual or ostensible authority? 24

‘Involved in’ Contravention - CIVIL 25

Active participant 26

Passive bystander 27

Innocent lack of knowledge 27

Criminal ancillary liability –s79 – MDC or s60 ONLY 27

UNCONSCIONABLE CONDUCT 29

s51AA 29

Is the conduct financial services? 29

Is there a corporation? 29

Is the conduct in Trade or commerce? 29

Is the conduct UC within the meaning of the ‘unwritten law’? 29

Duress 29

Undue influence 30

Unconscionable conduct 30

(in the sense of exploitation of a special disability) 30

Is there a special disability? 31

Has D taken advantage of the special disability? 33

s51AB – where App is a consumer 34

Is the conduct financial services? 34

Is there a corporation? 34

Is the conduct in Trade or commerce? 35

Is there the supply or possible supply of goods or services to a consumer? 35

Are the goods or services personal? 35

Is there UC? 35

s51AC 36

Is there a corporation? 36

Is the conduct in Trade or Commerce? 36

… in connection with the supply or possible supply or aquisisiton of goods 36

The goods or services must be priced higher than $3M 36

Respondent is corp? 36

Respondent is a person? 36

Is there UC? 37

Remedies 38

MISLEADING OR DECEPTIVE CONDUCT 38

s52 is not a fresh cause of action 38

Who can use s52? 39

There must be a corporation 39

Conduct in trade or commerce 39

Misleading or deceptive or likely to mislead or deceive 40

- The burden is on the applicant 40

- Nail down the conduct 40

Identify the class 40

Test the conduct against all members of the class 40

Mere confusion is not misleading or deceptive 41

Deception 42

No need for actual evidence of people mislead 42

Intention is not an element, but is probative 42

Fault or lack of reasonable care is not an element 42

Value of subjective evidence of people misled 43

Establishing M or D conduct by evidence 43

Survey evidence 43

Similar fact evidence 43

Causation 43

Erroneous assumptions 43

Exclusion clauses 44

Common types of M or D conduct 45

Representation or mere puff? 45

Contractual promises 45

Opinions 46

Silence 47

Does silence amount to conduct? 47

What sort of conduct amounts to a breach? 47

Providing incomplete information- half-truth 48

Comparative advertising 48

Character merchandising 49

Passing off style breach 49

Passing on information 49

Exceptions 49

FUTURE REPRESENTATIONS 51

There must be a representation about a future matter 51

Reps as to present state of mind – present rep 51

Rep as to present intention 52

Future rep 52

What is reasonable? 53

Burden of proof reversed 53

Pleading 53

FALSE CONDUCT – s 53 54

Mens rea not required 54

False rep goods have particular standard etc: s53(a). 54

False rep that services are of particular standard etc.: s53(aa). 55

False rep that goods are new; S53(b) 55

What is new? Defined by context of goods or formal test? 55

False rep that person has agreed to acquire G or S: s53(bb) 55

False rep that G or S have certain attributes: s53(c) 55

False rep that corporation has approval etc: s53(d) 55

False rep about price of G or S: s53(e) 55

False rep about availability of repair/parts: s53(ea) 56

False rep about place of origin: s53(eb) 56

False rep about need for G or S: s53(f) 56

False rep about warranty etc: s53(g) 56

Harassment and Coercion: s60 57

Physical force 57

Undue harassment 57

Coercion 57

ACCC debt collection guidelines 57

There must be a consumer 59

There is a presumption of consumer 59

If goods are acquired 59

Ordinarily acquired for personal, domestic or household use or consumption? 59

If services are acquired 60

There must be supply under contract 60

The supply must be by a corporation in the course of a business 60

Goods 61

Condition of compliance with description: s 70 61

There must be a sale by description 61

The goods must correspond with the description 61

Condition of merchantable quality: s 71(1) 62

Auctions are excluded: s71(1) 62

Are the goods of merchantable quality? 62

Does an exception apply? 63

Condition of fitness for particular purpose: s71(2) 64

The consumer’s purpose must be known 64

…to the corporation or person conducting antecedent negotiations 64

The goods must be ‘reasonably fit’ for that purpose 64

Exception: non-reliance or reliance unreasonable 65

Condition of correspondence with sample: s 72 65

Condition that seller has right to sell goods sold: s 69(1)(a) 65

Warranty of quiet possession: s69(1)(b) 66

Warranty that goods are free from encumbrances: s69(1)(c) 66

Services 66

Warranty of due care and skill: s 74(1) 66

Warranty of fitness related materials for purpose: s74(1) 66

Warranty of fitness for purpose made known: s 74(2) 66

Limited scope 66

The consumer’s purpose must be known 66

Services and materials must be reasonably fit for purpose: s74(2) 67

Exceptions 67

Some exclusion clauses void 67

Limitation of liability for domestic goods OK 68

Remedy 68

STATUTORY RIGHTS OF ACTION AGAINST MANUFACUTER OF GOODS– div 2A 69

Limitation period 69

Supplied by a corporation in trade or commerce 69

The goods must be manufactured by the corporation 70

The goods must be personal/domestic 70

There must be a middleman 71

The applicant can be a consumer or person deriving title from consumer 71

Consumer 71

Person deriving title from consumer 71

Non-excludability 72

Causes of Action 72

Goods not fit for purpose: s74B 72

Goods acquired for purpose made known 72

Defences 73

False description: s74C 73

There must be a sale by description: s74C(b) 73

Loss or damage suffered because goods do not comply 74

Defences 74

Unmerchantable quality: s74D 74

The goods must be of merchantable quality: s74D(c) 74

Damage must be suffered as a result: s74D(1)(d) 75

Defences 75

Non-correspondence with samples: s74E 76

Goods must be supplied by reference to a sample: s74E(c) 76

Non-correpondence 76

Loss or damage suffered as a result: s74E(e) 76

Defences 76

Failure to provide facilities for repairs or parts: s74F 77

Non-compliance with express warranty: s74G 77

Remedies 77

Manufacturer indemnifying seller 77

PARTVA – LIABILITY OF IMPORTERS AND MANUFACURERS 78

Limitation Period 78

Joint and Several Liability – s75AM 78

Manufacturer corporation, supplies goods, in T or C 78

Is R a manufacturer? 79

Defect 80

Causes of Action 82

Applicant is individual injured: s75AD 82

Applicant suffers loss because of individual’s injury or death:s75AE 82

Goods destroyed or damaged: s75AF 82

Damaged or destroyed goods must be personal/domestic: s75AF(c) 82

Loss suffered as a result of damage by user: s75AF(d) 83

Loss relating to buildings: s75AG 83

Private land, buildings or fixtures damaged or destroyed: s75AG(c) 83

Loss suffered as a result of damage by user: s75AF(d) 83

Complete Defences: s 75AK 83

Defect did not exist at supply time: s75AK(1)(a) 83

Compliance with mandatory standard: s75AK(1)(b) 83

State of scientific knowledge: s75AK(1)(c) 83

Component defence: s75AK(1)(d) 84

Contributory Acts: s75AN 84

Commission can take representative action 84

PART IVB – CODES OF CONDUCT 85

Franchising code of conduct 85

Relationship with s51AC 85

Limitation period 86

REMEDIES 87

Fines – ACCC ONLY –- s79 + PART VC 87

What level of fine? 87

Dismissal of charge 88

Non-punitive order: s86C 89

Part V contraventions – s86D 89

Defences to prosecution: s85(1) 89

Reasonable mistake: s85(1)(a) 90

Reasonable reliance on 3rd party info: s85(1)(b) 90

3rd party act or accident 90

s80 Injunction – PRIVATE/PUBLIC –IVA, IVB AND V ONLY 91

What type of injuntion sought? 91

There must be a breach or proposed breach 91

What is the role of the respondent? 91

Test for interim (1-2 weeks) and interlocutory injunctions: s80(2) 92

Serious question 92

Balance of convenience 92

Undertaking 92

Mareva order 93

Undertaking 94

s 87B – enforceable undertaking to ACCC 94

Damages under s 82 – PART IVA, IVB, V – PRIVATE ONLY 95

Limitation period 95

Does remedy apply? 95

What are the damages? 95

Is there a break in the chain? 97

Other orders: s87 -- INCLUDES OFFENCES 97

Declaration: s163A 98

IS THE CONDUCT IN TRADE OR COMMERCE?

One must consider both the wide and narrow views:

Narrow view - authoritative

The conduct must be ‘itself an aspect or element of activities or transaction which, of their nature, bear a trading or commercial character’ [Concrete Constructions (NSW) Pty Ltd v Nelson, per Mason CJ, Deane, Dawson and Gaudron JJ – a statement by a foreman to a worker was not in trade or commerce.]

It is not necessary that the transaction be engaged in for profit [Re Ku-ring-gai, per Deane J]

Promotion of goods or services for sale is in T or C [Concrete Constructions ; Nixon v Slater v Gordon]

Wide view

(not the law)

The conduct must in be in the course of carrying on an activity of a trading or commercial nature [Concrete Constructions, per McHugh and Brennan JJ].

Wide view: all corporate activity is in trade or commerce [Larmar v Power Machinery]

Special cases

Sales of private assets

Sales of private assets are generally not in trade or commerce [O’Brien Smolonogov]

In Argy v Blunts

Facts: Representations were made by a real estate agent before selling a private house

Held: The vendor was not liable for misrepresentations made in the sale of a private house because his conduct was not in trade or commerce.

This case followed Smolonogov - The agent making the representations was doing so in trade or commerce, however, this is not imputed to the vendor by s84(4).

Sale of part of a business

If a sale of part of commercial dealings as part of a chain of such sales, it is probably in trade or commerce [Gentry Brothers v Wilson Brown Associates ].

One-off sale of capital asset by business

This is generally in trade or commerce [Bevanere ; Lake Koala]

Bevanere Pty Ltd v Lubidineuse

(PRE- CONCRETE)

Facts: The vendor that used premises sold the business

Held: The sale of a capital business asset can’t be separated from trading activities, hence it was in trade or commerce. The appellant may have continued her trading activities elsewhere. Distinguished Smolonogov – there, the land was not used for business.

Employment Negotiations

The FCA is divided on whether representations made during the negotiation of employment contracts are in T or C.

Wilcox J in Patrick (1987) and Barto (1991): negotiating with both current (in obiter) and prospective employees is in T or C.

Heerey J in Mulchay (1998) disagrees on both counts.

Wilcox J’s view

Subsequent single judges have followed Wilcox J in Barto (1991) - Sdad v Chaplain (1991) 146 FCR 243 and Stoelwinder v Southern Healthcare per Finkelstein J.

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