Competition And Consumer Commission System

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Competition And Consumer Commission System

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Question:
Discuss about the Competition and Consumer Commission System.

Answer:
Introduction:

Consumer protection and fair trading in Australia are covered by the broad enactment of consumer law in Australia. January 1, 2011 marked the effective beginning date of the Australian Consumer Law. It must be mentioned at this point that both the Commonwealth and the state governments of Australia has worked in tandem to enact a consumer law framework that is not only strong, but also addresses all the issues that are faced by the consumers and the businessmen at large. In a general sense, the sale and purchase of land is always for a purpose. Broadly speaking, when they are either purchased for a household or a domestic purpose, such sale contracts are governed by the provisions stipulated under the Australian Consumer Law. Multiple instances of misrepresentation and fraud have been reported in respect of the transactions relating to the sale of land in Australia. It has been observed that another important issue that the consumers in Australia have to face in respect of the purchase of land are the intentional unfair terms that are contained in the contract time and again. Exhaustive statutes have been laid down under the Australian Consumer Law with regard to the protection of the Australian consumers from the evils of unfair terms and misrepresentation in relation to the consumer contracts for sale and purchase of lands in Australia. This assignment thoroughly discusses, in particular, the structure of protective measures that has been provided by the Australian Consumer Law regarding the effect that unfair terms and misrepresentation has on the transactions for sale of land.
It has been stipulated in Australian Consumer Law Section 18, that all people who are involved in transactions in relation to commerce and trade must not act on or indulge in practices that are based on deceptive or misleading information. This is primarily because of the facts that the very nature of the information renders the concerned act deceptive and misleading. It has also been stated that the persons who deal in commerce and trade transactions must also not act in a way that they had reason to believe may mislead or deceive the consumers. A diverse facet of businessesis covered under this section including contractual agreements, commercial negotiations and advertisements. The determination of whether an act of a particular conduct is deceptive or misleading is a factual question. The provisions of this section also govern the conduct of people in the course of sale of land in Australia. Section 18 further stipulates that the act or conduct of the persons does not have to deceive or mislead another individual to attract penalty but a mere possibility that such conduct may likely do so is sufficient ground.

Section 30 of the Australian Consumer Law governs misrepresentation in respect of property transactions in particular. Section 30 Australian Consumer Law stipulates that a person must not involve in misrepresentation in respect of sale or grant or future sale or grant regarding a property or the promotion of such property through the mechanism of sale or grant of that property. Any act that false or misleading representation in respect of an individual having an affiliation, sponsorship or approval in relation to the facilities and accessories attached to the land, provisions in respect of the legal use of such land, the characteristics of such land, the location of such land, the land’s nature or the land in general is regarded as misrepresentation. Any person transcending the provisions of this statutes is liable to be prosecuted with pecuniary penalty. It is also provided that the breach of the provisions of this statute may also attract injunctions, damages through civil proceedings and remedial orders. It has also been stipulated that the transactions that do not exceed the amount of AU$ 40, 000 are governed by the statutes of Australian Consumer Law.
The precedents provided by the courts over various landmark cases throw light on the conduct and actions that are generally regarded as misleading or false. In the landmark case of Given v Pryor (1979) 39 FLR 437, the respected judges held that the scope of misrepresentation is not just limited to verbal statements but also covers other conducts, maps, implied or oral conduct, written statements, images, demeanour, plans and gestures. In addition to this, the omission of a fact that is relevant in respect of the case that may likely harm the other party is also regarded as misrepresentation.
In another benchmark case of Given v CV Holland (Holdings) Pty Ltd (1977) 29 FLR 212 9 FLR 437. The concerned court held that misrepresentation can be defined as any act or conduct that is not in line with the facts that are original to the particular case. Therefore, the only defence that is left to the person accused or making false representations is to prove beyond reasonable doubt that his acts or conduct was bona fide.
In a subsequent widely cited case of Latella v LJ Hooker Ltd (1985) 5 FCR146, the judges opined that when claiming for misrepresentation, it is not a necessity to that the claim has to be specifically made by the particular individual who is the victim of such misrepresentation. As long as there has been a misrepresentation and such misrepresentation has resulted in damages to an individual as a direct consequence of it, a claim for misrepresentation can be made.
In the more recent case of Australian Equity Investors, An Arizona Ltd Partnership v Colliers International (NSW) Pty Ltd (No 4) [2011] FCA 442, the question which was in consideration by the court that achieving gross realization in respect of land’s development may be positively held as a deceptive or misleading conduct as per the provisions stipulated under section 52 of the Trade Practices Act 1974 (Cth) (now the section 30 of the Australian Consumer Law). This particular case shall be discussed at large in the course of this assignment. Another discrepancy that was discussed at large by the respected judges in this particular case was whether the false representations was in respect of the price of the land regarding the contravention of section 53A of the Trade Practices Act 1974 (Cth) (now the section 30 of the Australian Consumer Law).

It was held in the above-mentioned case that the primary respondent involved in conduct that was likely to mislead or deceive the petitioner. The conduct of the respondent was in respect of representation regarding the achievable gross realization and thereby contravened the provisions stipulated under section 52 of the Trade Practices Act 1974 (Cth) (now the section 30 of the Australian Consumer Law). In addition to this, it was also held that the primary respondent contravened the provisions stipulated under section 53A Trade Practices Act 1974 (Cth) (now the section 30 of the Australian Consumer Law) by making false representation regarding the price that is payable for the concerned property.
In addition to the above-mentioned breaches, it was also ruled by the respected judges that the primary respondent was to give the price of appeal that was incurred by the petitioner. Furthermore, the respected judges imposed a fine of $100,000 on the respondent. The respected judges also allowed the applicant a leave to file a motion for notice in order to seek security regarding the cost.
The court referred to the landmark case of Australian Competition and Consumer Commission v Gary Peer & Associates Pty Ltd (2005) 142 FCR 506 while discussing the present case. In the above-mentioned case, it was discovered that a person who had the authority to be a vendor gave a deceptive price guide in respect of the auction of land. In this case, the respected judges held that the conduct of the said vendor was in contravention of section 53 A of the Trade Practices Act 1974 (Cth) (now the section 30 of the Australian Consumer Law).
Unfair terms
The Australian Consumer Law also extends to the when unfair terms are included in a standard contract but had the potential to bring transactions in respect of the sale of land within its scope. The consumer contracts that are defined under the Australian Consumer Law also covers agreements that are drawn to bring about a sale or grant of interest that exists in a particular land to an individual wholly or predominantly for household or domestic use. Therefore, when such contracts include terms that are unfair they become liable to investigation. In addition to this, it must also be taken into account that the provisions in respect of unfair terms are applicable to consumer contracts. The subsequent part of the assignment investigates the structure in respect of the unfair terms that are ruled by the provisions contained in the Australian Consumer Law. It also related to the effect of the concerned provisions on the transactions regarding the sale of land(Griggs 2011).
The Australian Consume Law governs the concepts that are applicable to the legal practitioners regarding their client in respect of sale of lease of land to people. There are three concepts that determines whether a particular contract would come under the purview of the provisions of unfair terms. These determinants are:

Whether the particular contract comes within the scope of consumer contracts,
Whether the contract is a standard one, and
Whether any unfair term is comprised in the particular contact (Kolivos and Kuperman 2012).

It is the primary cause of the parties as well as the court to come to a conclusion as to whether the contract in respect of sale or grant of land is a consumer contract or not. The provisions of the Australian Consumer Law cover the consumer contracts that are in respect of sale or grant of land interest to an individual to intends to acquire the land for domestic, personal or household usage. It has also been mentioned that this above definition covers the equitable or lawful enjoyment of a land or any of the powers in relation to it, privilege or right in respect of the land. The provisions under the Australian Consumer law also extends to the sale of completed developments as well as “off the plan” developments. In addition to this, the rights in connection to the occupancy with regard to company title that includes ownership of land also comes under the purview of the definition.
Once it is determined whether a particular contract is a consumer contract, it needs to be analysed whether the contract is a contract of standard term or not. The matters that courts take into consideration to determine whether a particular contract is a standard term contract or not is unique to each case. However, it can be safely pointed out that the courts need to be taken certain factors into consideration. These factors are:

Negotiation powers: The court has to understand whether the power to bargain is solely or predominantly vested in one party only.
Preparation of contract: The court has to discover whether the particular contract was drawn up by one of the parties without consultation with the other party.
The kind of offer: The court as to further determine whether the offer made by one party was of such a nature that either the other party has to reject it or accept it without leaving any scope for negotiations.
Particular characteristics: The court has to take into account the unique features of the other party in respect of the transaction as well as any other circumstance that comes within the scope of any existing law.

After the above-mentioned factors have been analysed, the courts are in a position to determine whether a specific contract is in a “Standard Form of Consumer Contract”. Once that is achieved, the courts understand whether the unfair term provisions are applicable to the contract in question.
Section 24 of the Australian Consumer Law lays down the provisions in respect of the unfair terms. Three determinants must be satisfied in order to make a particular term in a contract for sale or grant of land unfair. These determinants are:

On the face of it, it is clear that that there exists a discrepancy regarding the rights of the parties and their obligations in respect of such contracts.
When it is clear that a particular term contained in the contract is unnecessary and protects a certain right of a party and provides benefits has been included by a party who does not need such protection.
When the above-mentioned term results in a disadvantage of one party when such term is relied upon (Lawson 2011).

It has been observed from precedent that whenever the courts face a circumstance where they have to determine whether a particular term is unfair, they need to take into consideration all the terms of the said contract. Transparency in respect of the use and legality of language regarding the particular term, availability and presentation. Diverse examples have been mentioned by the Australian Consumer law in respect of unfair terms. However, these examples are non-exhaustive. The avoidance or limitation in respect of the contract’s performance, the contract’s termination, variation regarding the contract’s terms, non-renewal or renewal of the contract, changing of the price payable upfront when the right of termination of contract or variation of characteristics of the facilities in the land sold or granted through the particular contract does not lie with the other party (Webb 2016).

The price that is payable and depends on contingencies cannot be regarded as an unfair term. In addition to this, the terms that essentially set out the terms of a particular contract are not regarded as unfair terms. These terms can be in relation to the description of the land that is to be sold, granted or leased through the particular contact. It must be mentioned here that these provisions are not applicable to “off the plan” sale contract that could be changed on completion. Any provision contained in the contract that gives the builder the freedom to change the features of the property that is in question is regarded as unfair term. Furthermore, the terms in the contract that are there essentially there because the legal provisions that exist provides such terms to be provided are not regarded as unfair terms.
An unfair term is generally excluded from the contract, while the rest of the contract is still legally binding where the contract can be pursued after the removal of such term. The contravention of the provisions of the Australian Consumer Law includes a fine of $1.1 million in respect of corporations and for natural persons it is $220000. The court might also issue disqualification orders in relation to the unfair terms. Substantiation and infringement may also be issued by courts in these cases. The courts may also issue a notice to provide warnings in respect of the acts of the concerned corporations to the public when such corporations contravene the statutes of the Australian Consumer law (Corones 2011).
The consumer contacts in relation to land must be well-structured and the documentation must be clear. The interests of the buyers that are legitimate must also be properly outlined (Competition 2011).
In the case of ACCC v Bytecard Pty Ltd 2013 the ASIC recovered penalty from the concerned company as they included unfair terms.

References
ACCC v Bytecard Pty Ltd 2013
Australian Competition and Consumer Act 2010
Australian Competition and Consumer Commission v Gary Peer & Associates Pty Ltd (2005) 142 FCR
Competition, A., 2011. Green marketing and the Australian Consumer Law. Commonwealth of Australia.
Corones, S.G., 2011. The Australian Consumer Law. Thomson Reuters Lawbook Co.
Covell, W., Lupton, K. and Forder, J., 2012. Covell and Lupton: Principles of Remedies.
DIETRICH, J., 2015. Liability arising from contract and under the Australian consumer law.
Given v CV Holland (Holdings) Pty Ltd (1977) 29 FLR 212
Griggs, L.D., 2011. Australian Consumer Law-An overview, unfair contracts, consumer guarantees and remedies. In Australian Consumer Law (pp. 1-9).
Kolivos, E. and Kuperman, A., 2012. Consumer law: Web of lies-legal implications of astroturfing. Keeping good companies, 64(1), p.38.
Latella v LJ Hooker Ltd (1985) 5 FCR146
Latimer, P., 2012. Australian Business Law 2012. CCH Australia Limited.
Lawson, R.G., 2011. Exclusion clauses and unfair contract terms. Sweet & Maxwell.
Webb, E., 2016. Unfair terms and small businesses. Australian consumer law, 31(1).

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