Australia: Competition and Consumer Law - What's News - 3 August 2016

Last Updated: 8 August 2016
Article by Howard Rapke, Ian Robertson and Paul Venus

Most Read Contributor in Australia, August 2019

In the media – National

Ozsale pays $10,800 penalty for alleged consumer guarantee misrepresentation
The ACCC issued the infringement notice because it had reasonable grounds to believe that Ozsale had made a false or misleading representation about consumers' rights to remedies for faulty goods by including the following clause in its terms & conditions relating to faulty products (28 July 2016). More...

Paciocco v ANZ Banking Group Ltd: Banking: Late Payment Fees
The High Court of Australia, in a majority decision has dismissed two appeals from the Full Court of the Federal Court of Australia. As a result the High Court held that in the first appeal:

  • late payment fees charged by the respondent (the ANZ Bank) on its consumer credit card accounts were not unenforceable as penalties; and in the second appeal has held that:
  • imposition of late payment fees did not contravene statutory prohibitions against unconscionable conduct, unjust transactions and unfair contract terms (27 July 2016). More...

Fees class action funder faces $9.5m hit
Litigation funder IMF Bentham says the High Court's dismissal of a class action against ANZ for excessive card fees may cost it up to $9.5 million (27 July 2016). More...

Australian Banks ask permission to form anti-Apple cartel
Several Australian banks have asked the ACCC for permission to collectively negotiate with Apple to get their digital wallets onto iPhones. The applicants also seek authorisation to enter into a limited form of collective boycott in relation to a third-party mobile wallet provider while collective negotiations with that provider are ongoing (27 July 2016). (SMH) More... (The Register) More... ( More...

ACCC raids CFMEU offices in Canberra as part of price fixing inquiry
The competition watchdog has launched raids on the CFMEU's Canberra headquarters as part of an investigation linked to allegations of price fixing in the construction industry (26 July 2016). More...

AFP union raid deemed legal, but police still can't view seized documents
The Federal Court in Brisbane rules an Australian Federal Police raid on the construction union's Brisbane headquarters last year was legal, but an injunction on viewing the documents seized remains in place (22 July 2016). More...

ACCC's Rod Sims says privatisations 'severely damaging' economy
The head of the competition regulator and a former advocate of privatisation has called for the privatisation of public monopolies to stop because the government is mishandling them. He says governments have created private monopolies without sufficient regulation to stop those monopolies overcharging users (27 July 2016). More...

ACCC: Small Business Concerns Rising
Small business enquiries and complaints continue to grow, according to the released ACCC Small business in focus report, detailing key developments over the last six months. These concerns include changes to new credit card surcharging laws in September, and new changes to the ACL that will extend protections from unfair contract terms in business-to-business dealings in November (26 July 2016). More...

ACCC: Full Court upholds unconscionable conduct finding against AMI
In dismissing NRM's appeal, the Full Court rejected NRM's arguments that the trial judge had made errors of fact and law in finding that NRM had engaged in unconscionable conduct targeting vulnerable consumers by its advertising and sales techniques (22 July 2016). More...

ACCC charting new waters with first criminal cartel prosecution
On 18 July 2016, Nippon Yusen Kabushiki Kaisha (NYK), pleaded guilty to criminal cartel conduct charges in the Federal Court of Australia, the first successful criminal prosecution for cartel conduct after the much heralded introduction of criminal sanctions as a powerful deterrent to companies and executives engaging in serious cartel conduct in Australia (22 July 2016). More...

Federal Court finds cable manufacturer engaged in cartel conduct
The Federal Court has found that Prysmian Cavi E Sistemi S.R.L. (Prysmian), engaged in cartel conduct in relation to the supply of high voltage land cables in Australia. Prysmian entered into and gave effect to agreements in breach of the price fixing and exclusionary arrangement provisions of the Trade Practices Act 1974 (now called the Competition and Consumer Act 2010). (ACCC) More... (SMH) More...

Push for unit pricing to be rolled out beyond supermarkets
Consumer groups want unit pricing, which compares product price by weight or litres, to be extended to other shops like chemists and hardware stores (21 July 2016). More...

Asciano buyout and Metcash's Home Hardware takeover get ACCC clearance
The competition watchdog says it will not stand in the way of ports and transport operator Asciano being bought out by a global consortium, nor will it block Metcash's possible Home Hardware takeover (21 July 2016). More...

PC: Regulation of Agriculture
Today the Turnbull Government has released the terms of reference for the Productivity Commission's inquiry into regulation of the Australian agricultural sector, with the inquiry to commence immediately. The inquiry will focus on regulation with a material impact on domestic and international competitiveness of farm businesses and the productivity of Australian agriculture (21 July 2016). Note: Written submissions close on 18 August 2016. The final report is expected to be handed to the Australian Government by 15 November 2016. More...

In practice and courts, published reports

ACCC: New law on unfair contract terms to provide protections for farmers and agriculture businesses
From 12 November 2016 a new law comes into place that will protect farmers and small businesses from unfair contract terms. If a farmer is concerned about the terms of a contract they have received, they should visit the ACCC website or contact the ACCC's Agriculture Unit for information about the law (19 July 2016). More...


Paciocco v Australia and New Zealand Banking Group Limited [2016] HCA 28
Appeal dismissed with costs. Banker and customer – Rule against penalties – Consumer credit card accounts – Late payment fees – Where late payment fees were $35 and $20 – Where costs actually incurred by respondent upon failure by first appellant to make timeous payment of amounts owing were approximately $3 – Where late payment fees not genuine pre-estimates of damage – Where respondent alleged it could conceivably have incurred loss provision costs, collection costs and regulatory capital costs as a result of first appellant's default – Whether late payment fees penalties – Whether late payment fees extravagant, exorbitant or unconscionable – Whether late payment fees out of all proportion to interests damaged – Whether respondent's legitimate interests confined to reimbursement of expenses directly occasioned by first appellant's default.
Contract – Rule against penalties – Essential characteristics of a penalty – Whether sum disproportionate to actual loss suffered amounts to a penalty – Whether sum incorporating loss too remote to be recoverable in action for damages amounts to a penalty – Relevance of Dunlop Pneumatic Tyre Co Ltd v New Garage and Motor Co Ltd [1914] UKHL 1; [1915] AC 79.
Trade practices – Consumer protection – Late payment fees – Unconscionable conduct – Unjust transactions – Unfair terms – Whether late payment fees unconscionable, unjust or unfair.
Precedent – Apex courts of foreign jurisdictions – Status of unwritten law of United Kingdom in Australia.
Words and phrases – "exorbitant", "extravagant", "genuine pre-estimate", "in terrorem", "late payment fees", "liquidated damages", "out of all proportion", "penalty", "unconscionable", "unconscionable conduct", "unfair terms", "unjust transactions".

NRM Corporation Pty Ltd v Australian Competition and Consumer Commission [2016] FCAFC 98
CONSUMER PROTECTION – unfair contract – unconscionability – undesirability of providing a comprehensive definition – the vulnerability of the consumer.
PRACTICE AND PROCEDURE – findings of fact in respect to matters not pleaded – need for amendment – findings made in respect to matters canvassed and put in issue at hearing. PRACTICE AND PROCEDURE – alleged delay in publication of reasons for decision – delay of itself not a ground of appeal.
PRACTICE AND PROCEDURE – need for caution before finding a witness has been untruthful – need to explain why evidence has been rejected.

Competition and Consumer Act 2010 (Cth), Sch 2, ss 21, 24, 25, 250; Trade Practices Act 1974 (Cth), ss 51AB, 51AC.

Casenote: Australian Competition and Consumer Commission (ACCC) v Prysmian Cavi E Sistemi SRL (fka Prysmian Cavi E Sistemi Energia SRL) [2016] FCA 822
The Federal Court of Australia (FCA) has declared that a foreign company engaged in market sharing and price fixing, in contravention of (CTH) Trade Practices Act 1974 , when tendering for a Hydro Project and giving effect to a Cartel Agreement. The FCA found further that the Cartel Agreement contained price fixing provision, and the Hydro Project Agreement contained exclusionary provision and price fixing provision.

Australian Competition and Consumer Commission v Prysmian Cavi E Sistemi S.R.L. (No 12) [2016] FCA 822

COMPETITION – alleged contravention of Trade Practices Act 1974 (Cth) and Competition Codes of the States – price fixing and market sharing – where relevant markets are for land cables and submarine cables in Australia – where alleged overarching international cartel arrangement or understanding – whether subsequent alleged arrangement or understanding relating to a tender on a specific project contravened Act – whether subsequent alleged arrangement or understanding gave effect to alleged overarching cartel arrangement or understanding – whether issuing a price guidance and submitting a tender gave effect to alleged arrangements or understandings – Trade Practices Act 1974 (Cth), ss 45(2)(a), 45(2)(b).

COMPETITION – price fixing and market sharing – consideration of elements of prohibited arrangement or understanding – whether parties undertook the level of commitment necessary for purposes of establishing an arrangement or understanding – whether there was competition in a market in Australia – whether the arrangement or understanding contained an exclusionary provision – whether there are "particular persons or classes of persons" for purposes of s 4D - whether arrangement or understanding had the purpose or was likely to have the effect of fixing or controlling prices – Trade Practices Act 1974 (Cth), ss 45, 45A, 4D.

COMPETITION – price fixing and market sharing – attribution of conduct – whether natural persons alleged to be involved in conduct were representatives of company respondents – consideration of agency principles – consideration of principles in Meridian Global Funds Management Asia Ltd v Securities Commission [1995] UKPC 5; [1995] 2 AC 500 - where respondent companies part of large company groups – where alleged natural persons not employees of respondent company – where no delegation of authority or powers or functions to alleged natural persons – Trade Practices Act 1974 (Cth), s 84(2).

COMPETITION – extra-territorial application of Trade Practices Act 1974 (Cth) – where alleged conduct was engaged in outside of Australia – whether respondents were foreign corporations carrying on business within Australia – whether respondent carried on business within Australia indirectly through a subsidiary in Australia – whether respondent carried on business within Australia directly by providing services to a subsidiary in Australia - Trade Practices Act 1974 (Cth), s 5.

EVIDENCE – objections to evidence – whether evidence should be excluded under the general discretion to exclude evidence – whether evidence was admissible as an opinion based on what a person saw, heard or otherwise perceived – Evidence Act 1995 (Cth) ss 135, 78.

Armstrong Strategic Management and Marketing Pty Limited v Expense Reduction Analysts Group Pty Ltd (No 9) [2016] NSWSC 1005
TRADE PRACTICES – misleading and deceptive conduct – whether representations made during the course of negotiations for an agreement concerning terms to be included in the agreement was misleading or deceptive

EQUITY – whether fiduciary relationship exists in connection with the negotiation of a commercial agreement CONTRACTS – general contractual principles – construction and interpretation of contracts – prior agreement inconsistent with existence of entire agreement clause EQUITY – estoppel – lack of relevant detriment

CONTRACTS – termination of contract – whether party in breach of contract entitled to terminate it for breach or repudiation by the other party – whether terminating party entitled to claim damages TRADE PRACTICES – unconscionability – operation of s 51AC TPA DAMAGES – pre-contractual representations – difference in damages where a transaction occurs as against a 'no transaction' case.

Court: dismissed the case against Expense Reduction Analysts Group Pty Ltd for alleged wrongful repudiation of expense reduction consulting agreement and misleading and deceptive representations in connection with the agreements.

This publication does not deal with every important topic or change in law and is not intended to be relied upon as a substitute for legal or other advice that may be relevant to the reader's specific circumstances. If you have found this publication of interest and would like to know more or wish to obtain legal advice relevant to your circumstances please contact one of the named individuals listed.

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