TRADE PRACTICES PARTS IV IVA, V, VA and VI s1

COMPETITION AND CONSUMER LAW

COURSE SYNOPSIS

MAY 2013

Note: cases referred to in the synopsis are given as examples only. the Subject Guide contains the full list of relevant cases. Additional cases may be added, from time to time.

Competition & Consumer Act 2011

As from 1 January 2011, the Trade Practices Act 1974 (“TPA”) was renamed the Competition & Consumer Act 2011 ("CCA").

Australian Consumer Law

The Australian Consumer Law (“ACL”), Schedule 2 of the CCA, contain the Deceptive Trade Practices & Product Liability provisions.

Trade Practices Amendment Act (Australian Consumer Law) Act 2010 (Cth), inserted a new Part XI into the CCA which provides for the “Application of the Australian Consumer Law as the law of the Commonwealth”.

Section 131(1) of the CCA states that the ACL applies to conduct of “corporations”.

It then refers to Schedule 2 in the CCA– “The Australian Consumer Law”.

ACL comprises 5 chapters. Within each chapter there are divisions, parts and sections.

The ACL largely reproduces the Deceptive Trade Practices & Product Liability provisions in the TPA and Fair Trading Acts e.g. s 52 of the TPA is s18 of the ACL ( Chapter 3, Part 2.1).

The principal changes introduced by the ACL are:

· A single set of definitions /interpretive provisions,;

· A national law on unfair contract term (Part 2-3);

· A single set of provisions about unfair practices and fair trading, including amendments and additions which reflect the existing provisions in State and Territory Consumer Law;

· New national consumer guarantees provisions, (Part 3-2, Division 1);

· A new national regime for unsolicited consumer agreements, which replace State and Territory Laws on door to door sales and other direct marketing;

· A new, national product safety legislative regime (Part 3-5).

State and Territory governments have retained their Fair Trading Acts. Section 131 C ("Saving of other laws and remedies"), ensures that the ACL operates concurrently with applicable State & Territory consumer law. To the extent that any provision of State consumer legislation are inconsistent with the CCA s 109 of the Constitution will apply to render the State legislation invalid.
Topic A:- Background and outline to the CCA.

Issues:

General purpose of CCA and its effects on a wide range of commercial activities and consumers.

Object and Structure:

s2. – “The object of this Act is to enhance the welfare of Australians through the promotion of competition and fair trading and provision for consumer protection.” by prohibiting anti- competitive conduct/restrictive trade practices(“RTP”), “deceptive trade practices (“DTP”) inadequate/defective products/services (product liability). This

RTP contained in Part IV of the CCA, comprises:

· anti- competitive agreements between competitors which contain cartel provisions (Divi 1)

· anti- competitive agreements between competitors which contain exclusionary provisions (s4D) or substantially lessen competition (s45,)

· misuse of market power (s46)

· exclusive dealing (s47)

· resale price maintenance (s48, 96 – 100)

· mergers/acquisitions (s50 and 50A)

DTP comprise:

· Unconscionable Conduct (Part 2.2- ACL),

· Industry Codes (Part IVB of CCA)

· Misleading or deceptive conduct (part 2 – 1 of ACL

· Unfair contract terms (Part 2 – 3 of ACL)

· Unfair Practices (Part 3.1 of ACL).

Product liability provisions comprise:

· Consumer guarantees (Part 3.2 of ACL);

· Actions against manufacturers for goods with safety defects (/Part 3.5 of ACL)

“Enforcement refer to sections in Part VI of CCA & Chapter 5 of ACL

Remedies” refer to sections in Part VI, VIA & B of CCA & Chapter 5 of ACL.

Desired Outcome:

Appreciation and understanding of broad objectives and structure of the CCA & ACL.

Topic B: Constitutional Basis for CCA (including ACL)

Issues:

Heads of Power under Australian Constitution relied upon.

Extended jurisdiction of the Act.

Structure:

Main head of power:-Corporations Power. [S51 (XX)] – provides for the making of laws concerning the “trading” activities of “trading corporations” (defined in s4 of TPA.)

Other heads of power used to extend the operation of CCA to include “persons”.

“Person” defined in the Acts Interpretations Act to include a “body a corporate & a body politic”.

Other heads of power:

Trade & Commerce power [s51 (I)],

Territories power, [s122],

Posts & Telegraph [s51 (v)],

Executive power coupled with incidental power [s61, &s51 (xxxix)]

Refer s6 of CCA in relation to “persons" e.g. "post and telegraphic power" see s6 (3) (Smolonogov v O'Brien & and Pears v Balzer involving use of a telephone by person, Dataflow v Goodman involving use of email) by person.

CCA not meant to cover everything.

Fair Trading Acts of the various states & territories still operative. Also see ASIC Act, Corporations Act and other federal and state legislation.

Desired outcome:

Understanding

· the Constitutional basis for the TPA.

· consequential limitations of its application

· extended jurisdiction of the CCA including its application to “persons”.

Topic C:

(i) Government entities covered by the CCA & Definitions.

(ii) Interpretations and definitions of terms.

Issues:

When are government and other entities subject to the Act?

Structure:

ss2A, 2B, 2BA and 2C of CCA deem. C’w, State & local: government bodies, "in so far as they are carrying on a business”, to be “corporations” & hence covered “by CCA Activities that are “governmental” in nature are excluded ( JS McMillan Pty Limited, RT. Fall Invest, Village Building v Canberra Airport (as it pertains to Air Services Australia), NT Power Generation).

. Excluded government Activities (s2C of CCA)

Definitions

4(1)) defines a “business” to include "one not carried on for profit"

“Corporations” (s4) - either “trading” (Hughes v WA Cricket Assoc, R v Fed Ct of Aust ex parte: WA Nat Football League) or “financial” (State Super Board of Vic)

A "corporation": determined by “activities test” (e.g. WA Football Club, State Super Board of Victoria, E v Australian Red Cross Society, Fencott v Muller).

"Financial corp" (e.g. State Superannuation Board of Vic., Bourke, SGIC v GIO).

"Acquire", “acquisition, supply and resupply" (s4C of CCA & s 2 of ACL),

“acquisition of shares” (s4 (4)) - relevant to s50

Terms: "goods", “services”,

"in trade or commerce" vrs “in connection with trade and commerce” (see Glorie v WA Chip & Pulp, Nelson v Concrete Const, Pritchard v Racecage, AFCO v Tobacco Institute, Pears v Balzer, Martin v Tas Devel, McCormick Inter, Dataflow)

“conduct" including by silence (see Henjo v Collins Marrickville Demagogue Pty Ltd. v Ramensky, Metalcorp Recyclers), Defence of “inadvertence” (Costa Vraca)

“consumer” (s4B of CCA & s 3 of ACL).

“injury loss or damage including personal injury” (s4K & s4KA)