Australia: Competition & consumer law news – 1 August 2017

Last Updated: 6 August 2017
Article by Howard Rapke, Ian Robertson and Paul Venus

Most Read Contributor in Australia, July 2017

In the media

ACCC to 'up the ante' against cartels: report
A global law firm has released data on cartel activity around the world, predicting increased activity from Australia's corporate regulator in the second half of 2017. However, Allen & Overy said the regulator may be more active over the rest of the year as it is waiting on several judgments and penalty outcomes, including its successful High Court case against Flight Centre for attempted price-fixing (26 July 2017). More...

See also Allen & Overy Global Cartel Enforcement 2017 Mid-Year report. The report notes that in the past six months the ACCC has issued only one cartel fine, but that increased activity is expected in the second half of 2017 as the ACCC awaits judgments and penalty outcomes in a number of proceedings (including the Flight Centre case).

ACCC focus on Brownes WA dairy contracts
The Australian Competition and Consumer Commission investigates new Brownes milk producer contracts, as part of its on-going national inquiry into the dairy industry (26 July 2017). More...

ACCC takes action against Ford
The ACCC has instituted proceedings against Ford Motor Company of Australia Limited (Ford) alleging that it engaged in unconscionable and misleading or deceptive conduct, and made false or misleading representations in its response to customer complaints. The ACCC alleges that Ford misrepresented to customers who made complaints that the issues with their vehicles were caused by the way the driver handled the vehicle, even though Ford was aware of systemic issues with the vehicles from at least 2013 (26 July 2017). More...

ACCC to hold first public hearing into power prices
The ACCC held its first public hearing into power prices in Brisbane as part of its inquiry into national electricity prices, ordered by the Treasurer in March. Several other forums are scheduled over the coming months. The ACCC has also released an overview of the submissions made in response to the issues paper (25 July 2017).

ACCC Begins Court Action against Heinz over Sugary Products
Legal action against H.J. Heinz Company Australia Ltd (Heinz) commenced on Monday 24 July 2017, with the Australian Competition and Consumer Commission (ACCC) alleging the "Little Kids Shredz" range misleads the public about the nutritional content of the product (25 July 2017). More...

Egg producer penalised $750,000 for misleading 'free range' claims
The Federal Court has ordered Snowdale Holdings Pty Ltd to pay penalties totalling $750,000 for making false or misleading representations that its eggs were 'free range', in proceedings brought by the Australian Competition and Consumer Commission (25 July 2017). More...

Lululemon pays infringement notices
Lululemon Athletica Australia Pty Ltd (Lululemon) has paid penalties totalling $32,400 following the ACCC issuing three infringement notices for alleged false or misleading representations about consumer guarantee rights. The ACCC alleges that Lululemon made representations to customers that they were not entitled to a refund or replacement for products under any circumstances, when that was not the case (24 July 2017). More...

ACCC says Small Businesses just need a level playing field
The Australian Competition and Consumer Commission has taken action over the last six months to ensure small business have a level playing field, as revealed in the 14th edition of the ACCC's Small Business in Focus report (24 July 2017). More...

Ezy Lite Pty Ltd and Adnan Dennaoui - Court outcome
A building cladding company and its director have been convicted and fined a total of $70,000, after pleading guilty to making false and misleading representations about the fire ratings of some of its products (21 July 2017). More...

ACCC warns big four telcos over NBN internet speed failures
The competition watchdog warns Australia's largest four telcos they could find themselves in court for failing to deliver on their NBN speed promises (20 July 2017). More...

ACCC on changing telecommunications market dynamic
Australian Competition and Consumer Commission Chairman Rod Sims said he believed it was important that the promotion of competition in relevant markets is included within the new spectrum framework. Anti-competitive behaviour can be prevented in many ways, including through spectrum caps, or establishing rules specifying how spectrum can be traded by licensees (20 July 2017). More... More...

ACCC statement on Aldi Flushable Wipes
The ACCC has this week, raised concerns with ALDI regarding its promotion of ALDI Green Action Flushable Bathroom Cleaning Wipes (100pk) in its Special Buys catalogue. The ACCC's concerns stem from the use of the term 'flushable', in particular the concern that such a claim may mislead consumers if the claim cannot be substantiated. The ACCC is already pursuing alleged misleading 'flushable' claims more generally, with two proceedings currently before the Federal Court against Pental and Kimberly-Clark Australia Pty Ltd (19 July 2017). More...

Uber surge pricing to be capped in Victoria after Metro chaos
Exorbitant fares on Uber during major traffic incidents and public transport delays could be stamped out by new Victorian laws, the Andrews Government declares. The ridesharing company uses "dynamic pricing", which means that when demand is higher fares increase. Users are given a quoted price before they accept a fare. Victorian Public Transport Minister Jacinta Allan said the surge pricing behaviour was unacceptable (18 July 2017). More...

Further action to create a more competitive banking system for Australians
More competitive loans and other financial products for Australians will be encouraged through new reforms announced by the Turnbull Government in the 2017 Budget (17 July 2017). More...

Huntley Management Ltd ordered to pay penalty for false and misleading advertising
The Federal Court of Australia has ordered Huntley Management Limited (Huntley) to pay a penalty of $50,000 for false and misleading advertising that its investment projects were 'approved by the Australian Securities and Investments Commission' Huntley, which is a responsible entity of various managed investment schemes, admitted that the statements were false and misleading (14 July 2017). More...

In practice and courts, published reports

2017 AEMC retail energy competition review - final report
Australian Energy Market Commission: 25 July 2017
The AEMC has released its fourth annual review of the state of competition in retail energy markets across the national electricity market. This review report makes a number of recommendations to make it easier for customers to take advantage of competition and make the best energy choices for their household or business. More...

Electricity supply and prices inquiry public forums
The ACCC is inviting electricity customers to participate in a series of public forums as part of the Electricity supply and prices inquiry. Attendees will have the opportunity to raise competition and pricing issues in the retail electricity sector with ACCC Commissioners. Following the forums, a summary of issues discussed at the forums will be published on the ACCC website. Consultations close 14 August 2017. More...

NSW Fair Trading: Have your say on retirement village reforms
NSW Fair Trading is inviting public comment on draft reforms affecting the state's retirement villages. The new regulation will retain a number of existing provisions, while also making amendments to reduce excessive administrative requirements for operators, and improve protection for both prospective and current residents. More...

Cases

Island Helicopters Pty Ltd v Central (Qld) Aviation Pty Ltd & Anor [2017] FCCA 1665
CONTRACTS – Lease agreement in relation to helicopter – term that lessor at its cost would take out hull insurance for helicopter - whether it was a term of the lease agreement that the helicopter could operate only in Australia – whether lease agreement was varied to the effect that lessee agreed to pay additional insurance premium that became payable by lessor because the helicopter was to operate in Papua New Guinea (PNG) – no variation of lease agreement.
CONTRACTS – Discharge of lease agreement by repudiation – helicopter destroyed as a result of crash – lessee makes no payments under lease agreement for period after date on which helicopter crashed – whether by not making such payments lessee repudiated the lease agreement – whether lessor elected to terminate the lease agreement on account of claimed repudiation by lessee of lease agreement so as to entitle lessor to loss of bargain damages – no evidence lessor elected to terminate lease agreement.
CONTRACTS – Discharge of lease agreement by frustration - whether because helicopter was destroyed as a result of a crash the lease agreement was discharged by frustration – whether at the time the helicopter was destroyed the lessee bore the onus of proving it did not induce the crash – lease agreement frustrated.
CONTRACTS – Whether under the lease agreement the lessor was required to insure not only the Helicopter but equipment that was also hired to the lessee under the lease agreement.
CONSUMER LAW – Misleading or deceptive conduct – whether terms in lease agreement constituted representations as to future matters – whether lessee adduced evidence it had reasonable grounds for making the representations constituted by the terms of the lease agreement – whether lessor relied on the terms to deliver the helicopter to lessee – whether lessor suffered any loss by relying on the terms.
CONSUMER LAW – Misleading or deceptive conduct and unconscionable conduct – whether lessee represented to the lessor it would pay additional insurance premium that became payable by lessor because the helicopter was to operate in PNG – whether lessor suffered any loss or damage. Civil Aviation Act 1988 (Cth), ss.3, 6, 7, 7(b); Federal Circuit Court of Australia Act 1999 (Cth), s.76(3); Trade Practices Act 1974 (Cth), ss.51AA, 51AC, 51A, 51A(2), 52, 52(1), 82.

Melbourne City Investments Pty Ltd v Myer Holdings Limited [2017] VSCA 187
PROCEDURE – Abuse of Process – Applicant created as vehicle for bringing class actions against listed corporations – Applicant held shares in respondent purchased for less than $1,000 –Applicant not concerned with being compensated for loss nor with bring the proceedings for the benefit of the group members – Applicant sought to profit through orders for payment to it for acting as representative plaintiff and funding litigation – Proceeding stayed by trial judge as abuse of process because predominant purpose for bringing proceeding to gain collateral advantage that was improper – Proceedings are designed to redress wrongs - Relief applicant sought not for that purpose but to gain benefit of ancillary orders – Such relief 'outside the scope of the remedy' as discussed in the authorities – Appeal dismissed - MCI is the lead plaintiff in a securities class action against Myer. It alleges that Myer breached its continuous disclosure obligations under the Corporations Act and that Myer engaged in misleading and deceptive conduct.

Australian Competition and Consumer Commission v Snowdale Holdings Pty Ltd (No 2) [2017] FCA 834
CONSUMER LAW – pecuniary penalty – representations made that the eggs sold were "free range" eggs – consumers paid a premium price on the basis that the eggs were free range eggs – loss to consumers by contravening conduct – benefit to contravenor – revised agreed penalty – deterrence – whether revised agreed penalty an appropriate penalty. Australian Consumer Law ss 18(1), 29(1)(a), 33, 134, 219(2), 224(1), 224(2) (Sch 2 of the Competition and Consumer Act 2010 (Cth)); Competition and Consumer Act 2010 (Cth) s 155(1)(b).

Central Queensland Development Corporation Pty Ltd (formerly Bluechip Development Corporation Gladstone) Pty Ltd v BMT & Assoc Pty Ltd [2017] NSWSC 992
(1) Order pursuant to UCPR 42.21 that the plaintiffs give security for the costs of the defendant by providing it with a bank guarantee in the sum of $120,000.
COSTS – security for costs – UCPR 42.21 or s1335(1) Corporations Act 2001 – where evidence from defendant suggests that neither plaintiff would be able to meet an adverse costs order – where plaintiffs have not themselves provided any evidence of their ability to pay the defendant's costs of proceedings – where the plaintiffs' financial position is not the result of the alleged conduct of the defendant – whether there has been any delay in the present application – whether the assessment of anticipated costs is reasonable. The plaintiffs appear to allege that by reason of the defendant's breach of contract and/or misleading and deceptive conduct, the project could not be completed on budget but instead suffered a substantial costs blowout amounting to more than $1.65M.

Weatherill v Bartlett [2017] NSWCA 175
CONSUMER LAW – misleading or deceptive conduct – where aircraft purchased in reliance upon misleading estimate of transportation cost – where value of aircraft exceeded purchase and transportation cost – whether loss suffered.
PROCEDURE – leave to appeal – where application for leave to appeal from appeal on question of law – whether costs of proceedings at first and second instance included to satisfy threshold in Supreme Court Act 1970 (NSW), s 101(2)(r) – no question of principle; Competition and Consumer Act 2010 (Cth), Sch 2, ss 18, 236.

Gemini Energy and Minerals Pty Ltd -v- Luff [2017] WASC 190
Contract law - Share subscription agreement - Claim for a debt - Whether parties intended to create legal relations - Whether condition precedent - Whether concurrent obligations - Whether agreement abandoned - Whether defendant induced by alleged misleading or deceptive conduct - Turns on own facts. Australian Consumer Law (Cth), s 18, s 237, s 243.

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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