Studmaster Pty Ltd was a landlord that owned a shopping complex in Bourke Street, Melbourne. Mrs Tran operated the “Vietnamese Lunch Box” outlet in the food court. She had little ability to speak or read English, which the representatives for Studmaster knew about. Studmaster proposed a three year renewal of her lease at $48,000 per annum plus GST for the first year and CPI increments in the second and third years.
A representative for Studmaster told Mrs Tran that:
• “We believe the new rent is very reasonable and below the market value”; and • “The rent is lower than the rental paid by other tenants in the Food Court”
Both statements were incorrect. Studmaster gave Mrs Tran 7 days to agree to the lease renewal, but provided no reason for giving this limited time frame. Advise Mrs Tran as to whether Studmaster Pty Ltd has breached the Competition and Consumer Act 2010 (previously referred to as Trade Practices Act 1974 (Cth)) and if so, her available remedies.
Issue: Were the statements misleading or deceptive in breach of the Australian Consumer Law?
• Section 18, Schedule 2 to the Competition and Consumer Act 2010 (Cth) (or alternatively you can say Section 18 Australian Consumer Law which is the title for Schedule 2) • Section 4 (“presumption of misleading”)
• Eveready Australia Pty Ltd v Gillette Australia Pty Ltd OR Taco Company of Aust Inc v Taco Bell Pty Ltd (“objective test”)
• Explain which of the statements was an opinion and why the law presumes it was misleading (ie was there any basis for making the opinion?) • Apply the objective test to the second statement made by the Studmaster representative. In particular: (what will be the target market and why would a reasonable person from that target market be misled or deceived?)
Issue: Did Studmaster engage in unconscionable conduct?
• Section 22 Australian Consumer Law
• Miller v Gunther & Ors OR Commercial Bank of Australia v Amadio
• Explain why section 21 and not section 20 applies
• Explain why Studmasters’ conduct was in trade or commerce • Explain what the conduct was and why it was unconscionable, with reference to the factors listed in section 22 of the Australian Consumer Law. In particular: o The superior bargaining position of Studmaster
o Ability to understand documents
o Undue pressure and tactics used
Issue: Did Studmaster make a false or misleading representation?
• Section 29(1)(i) Australian Consumer Law
• Explain why the statements were false regarding the price of a service, in particular noting what the relevant price is and what the service is in the question.
Issue: What are the remedies?
Law: Section 236 (damages); Section 232 (injunction); Section 243 (other orders)
• Explain the remedies that Mrs Tran would be seeking as you are advising her and not the ACCC. In particular: o Explain what an injunction would do and why Mrs Tran would want this remedy; o Explain when Mrs Tran would be entitled to damages and how damages would be calculated o Explain when Mrs Tran would want to vary the contract and what the variation would be o Explain when Mrs Tran would want to void the contract and what the effect of voiding the contract would be Conclusion:
• Studmaster has engaged in misleading and deceptive conduct, unconscionable conduct and made a false or misleading representation in respect of the price of a service. Mrs Tran can seek a variety of remedies including damages, fine and injunction.
Note to students: Facts based on the decision of ACCC v Dukemaster Pty Ltd
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