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adjudicators · 7 years ago

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What is 'intellectual property'?

How are intellectual property rights protected?

Types of property

Intellectual property [IP] refers to a variety of rights conferred by law for the protection of creative effort and the economic investment that underlies it

"Intellectual property represents the property of your mind or intellect. In business terms, this also means your proprietary knowledge." IP Australia

IP rights allow creators, or owners, of patents, trademarks or copyrighted works to benefit from their own work or investment in a creation.

Types of intellectual property

Statutory protection of intellectual property

Designs - Designs Act 2003

Patents - Patents Act 1990

Trade Marks - Trade Marks Act 1995

Protecting brands: The "Names" Regimes

Registered ®

Unregistered TM

Registered trade marks

S17 Trade Marks Act 1995 (Cth)

'a sign used, or intended to be used, to distinguish goods or services dealt with or provided in the course of trade by a person from goods or services so dealt with or provided by any other person'

Protecting a trade mark

What kind of things can you trademark?

Logos?

Musical jingles?

Colours?

Scents?

Sounds?

Movement?

Protecting Designs: Registered Designs

The Australian law of designs is governed by the Designs Act 2003 (Cth)

Designs refers to the feature of shape, configuration, pattern or ornamentation which can be judged by the eye in finished products

Design registration is used to protect the visual appearance of manufactured products

A registered design gives you a legally enforceable right to use your product's design to gain a marketing edge. It also prevents others from using the design without your agreement

Design registration is intended to protect designs which have an industrial or commercial use

Designs which are essentially artistic works are covered by copyright legislation and are not eligible for design registration

The protection you receive is only for the appearance of the article and not how it works

Protecting Expression: Copyright

Literary works

Artistic works

Musical and dramatic works

Sound recordings

Cinematographic films

Television and sound broadcasts

Published editions of works

Statutory copyright protection

Protection from copying is granted for 70 years

Protection is automatic on the particular work being created

Enforcing copyright

Dallas Buyers Club attempted to obtain contact details of customers of various Australia internet service providers who had allegedly engaged in piracy of the film

Concerned 'speculative invoicing' - attempting to coerce parties to settle out of court rather than risk being sued

Case thrown out due to the amount of money being claimed

No need to actually read this case

Defences

S40: research or study

S41: criticism or review

S41A: Parody or satire

S42: Reporting news

A few other examples in Part III, Division 3

****Defences - reform proposals

40 Fair dealing for purpose of research or study

41: Fair dealing for purpose of criticism or review

41A: Fair dealing for purpose of paradoy or satire

42: Fair dealing for purpose of reporting news

Protecting Inventions: Patents

Be new

Involve an incentive step (for a standard patent)

Be a 'manner of manufacture'

Be useful

The law usually frowns on monopolies

Patents confer (grant) a monopoly. Why?

To promote innovation

Protect new ideas

Protecting trade secrets/confidential information

The information has the necessary quality of confidence about it

The information was imparted in circumstances importing an obligation of confidence

There has been an unauthorised use of that information to the detriment of the party communicating it

An example of IP in action: Franchising

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adjudicators · 7 years ago

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This tutorial focuses on the topic of competition law, with a primary emphasis on the regulations in the Competition and Consumer Act 2010 (Cth). The powers of the Australian Competition and Consumer Commission (ACCC) will be discussed along with some examples of how anti-competitive behaviour can be regulated in the real world.

Explain the constitutional basis for the Competition and Consumer Act 2010 (Cth)

ACL is within Schedule 2 of Competition and Consumer Act (Cth)

Commonwealth does not have constitutional power

Explain the concept of a "market" for the purposes of Part IV of the CCA

A market is the 'area of close competition between firms' or the 'field of rivalry between them'

Can be defined in terms of multiple dimensions:

Product

Geographic

Functional

Time

Give examples of conduct which may breach the following sections of the CCA:

Anti-competitive agreements (s45)

Contract, arrangement or understanding

Has the purpose or would be likely to have the effect

Exclusionary provision

Substantially lessen competition

Price fixing (s45C)

Arrangements between competitors to fix prices at a certain amount

This may be to artificially generate monopoly profits or to lock out competitors

TPC v TNT Australia (1995) ATPR 41-375

TNT entered into an arrangement with two other firms to fix prices by deliberately misquoting prices to customers

If a customer of TNT's requested a quote from one of the other firms, the other firm agreed to supply a higher-priced quote

Primary boycotts (s45(2))

Where firms agree to deliberately restrict the supply of goods or services to a particular person or class of persons

News Limited v Australian Rugby League (1996) ATPR 41-375

Clubs intended to join the ARL were required to sign a 'loyalty agreement' agreeing not to participate in any other rival league for a period of five years after the agreement had been signed

Secondary boycotts (s45D)

Instead of directly restricting supply to a persons, secondary boycotts result where firms act to prevent a third party from supply acquiring goods or services or engaging in trade or commerce

Leon Laidley v Transport Worker's Union [1980] FCA 15

LL was a fuel distributor for Amoco, a petrol company

TWU members employed by Amoco commenced strike action to prevent delivery of fuel to LL

Misuse of market power (s46)

Section 46:

Eliminating or substantially damaging a competitor of the corporation

Preventing the entry of a person into that or any market

Deterring or preventing a person from engaging in competitive conduct in that, or any market

Elements:

Substantial degree of power (threshold)

Taking advantage for power (predation)

Damage, prevent entry or deter from engaging in competitive conduct

Boral Besser Masonry v ACCC (2003) 215 CLR 374:

Boral 30% market share aggressively cut the prices of its concrete masonry blocks to drive rivals out of the market

Held that the predation element was satisfied but not the threshold element

Exclusive dealing (s47)

An arrangement between two parties where only one type of good/service is sold as a condition

Streets Ice Cream Pty Ltd [1975] ATPR (Com) 8609

Supply of a refrigerated ice cream cabinet on the condition it was used exclusively for the supplier's product and no others

Resale price maintenance (s48)

Prohibits suppliers from specifying a price below which goods cannot be resold or supplied

ACCC v Jurlique [2007] FCA 79

Jurlique found to have engaged in resale price maintenance through:

Inducing retailers not to sell Jurlique products at prices less than those specified

Withholding supply of products to retailers that did sell below the prices specified

Making statements to retailers that were likely to be interpreted as setting prices below which products were not to be sold

Price fixing (s45C) / Anti-competitive agreements (s45)

Flight Centre

Misuse of market power (s46)

Ticketek

Engaged in conduct with the anti-competitive purpose of deterring or prevent in Lasttix from supplying its service - Lasstix offers promotional services to event organisers to target consumers wanting to buy 'last minute' discounted tickets

Penalised $2.5 million

Resale price maintenance (s48)

Mitsubishi Electric

$2.2 million

Induced and attempted to induce one of its dealers, Mannix Electrical Pty Ltd (Mannix) not to sell Mitsubishi Electric branded air conditioning products at prices below a minimum specified price

Reduced the discounts Mannix had received from Mitsubishi Electric by terminating it's 'dealer' status, for reasons including Mannix's failure to increase its price of Mitsubishi Electric branding air conditioning products to the minimum specified

Secondary boycotts (s45D)

Doric

Primary boycott (s45(2))

AMA - price fixing as well

$285,000 costs

Relates to the supply of medical services to Joondalup Health Campus in Perth

Engaged in price fixing and primary boycott conduct over supplying medical services by visiting doctors to Mayne Nickless Limited for the care of Joondalup public patients

Exclusive dealing (s47)

VIP Packaging

What are per se offences?

This means that you don't have to prove that the conduct lessened competition, you just have to prove that the conduct in question took place

Examples: cartel conduct, price fixing, resale price maintenance, etc.

Price of goods/services

Appearance of goods/services

Attractiveness of goods/services

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adjudicators · 7 years ago

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The story so far

The Constitution: separation and division of powers, federalism and more

Statutory interpretation: statutes, delegated legislation, rules for interpretation

Doctrine of precedent: court system and hierarchy, rules of precedent

Formation of contract: elements, factors affecting agreement

Operation of contract: terms, breach, remedies

Specific issues affecting contracts in business

The requirements of the tort of negligence: duty of care, breach, causation and remoteness

Specific issues in negligence: economic loss, negligent misrepresentation

Consumer guarantees

Misleading and deceptive conduct

Unconscionable and unfair conduct

Competition law and policy

Prohibited trade practices

Copyrights, trademarks, patents and designs

Skills and outcomes

Understand the way the legal system works

Know how to read and research cases, determine the ratio decidendi and formulate legal rules

Apply legal rules to problem questions using a structured method

Understand the way that the common law works

Understand the way statutory regimes work and the interaction between statute and common law

Recognise the role that regulatory policy has in the day to day operations of a business

Why study competition law?

"If Australia is to prosper as a nation… Australian organisations… must become more efficient, more innovative and more flexible… There has been a growing recognition… of the role that competition plays in meeting these challenges. Competition provides the spur for businesses to improve their performance, develop new products and respond to changing circumstances. Competition offers the promise of lower prices and improved choice for consumers and greater efficiency, higher economic growth and increased employment opportunities for the economy as a whole."

Hilmer Report, National Competition Policy 1993

In the Panel's view, competition policy should:

Make markets work in the long-term interests of consumers

Foster diversity, choice and responsiveness in government services

Encourage innovation, entrepreneurship and the entry of new players

Promote efficient investment in and use of infrastructure and natural resources

Establish competition laws and regulations that are clear, predictable and reliable

Secure necessary standards of access and equity

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

Competition and Consumer Act 2010 (Cth), s2

S2: the object of this Act is to enhance the welfare of Australians through the promotion of competition

This is about protecting competition, not individual competitors

A note about statutes

Competition and Consumer Act 2010 (Cth)

Australian Consumer Law

Difference: one is part of the other

When we refer to the Australian Consumer Law we are talking about a schedule to the Competition and Consumer Act

Looking at the Act itself

Competition law, policy and history

Recommended national uniform competition laws and the regulation of all forms of business, from corporations to sole traders

Expanded the Trade Practices Commission to become the Australian Competition and Consumer Commission (ACCC)

Mostly unchanged from the Trade Practices Act but consumer law provisions added

56 recommendations

Most accepted by government

56 recommendations

Turnbull government responds to Harper view into competition laws, accepts majority of recommendations

Ian Harper reform on competition in cold storage

Election

More on this later

Competition and Consumer Amendment (Competition Policy Review) Bill 2017

The Restricted Trade Practices

Anti-competitive agreements: basic principles

Contains and exclusionary provision, or

Has the purpose, or would be likely to have the effect, of substantially lessening competition

Contract, arrangement or understanding

Has the purpose or would be likely to have the effect

Exclusionary provision

Substantially lessen competition

"For these to be an arrangement or understanding there must be a meeting of the minds… there must be a consensus as to what is to be done"

TPC v Email (1980) ATPR 40-172

Can be inferred by indirect or circumstantial evidence

TPC v David Jones (1986) ATPR 40-671

"You guys already know what contracts are, right?"

CLAW1001 Instructor (2016)

Means we can look either to the intention of the parties (subjective - personal) or to an assessment of the likely affect of the action on the market (objective - unbiased)

An agreement between two or more competitors in which they agree not to supply or acquire goods or services from a particular person or persons

What does competition even mean?

What is competition?

Price of goods/services

Appearance of goods/services

Attractiveness of goods/services

"Substantially lessen competition"

What is the appropriate market/markets for the conduct in question?

What would be the probable extent of competition in the market but for the conduct in question?

What is the likely effect of the conduct on the market?

Will that conduct have the effect of substantially lessening competition in the market?

What is a market?

Product

Geographic

Functional

Time

"Too narrow a description of the market will create the appearance of more market power than in fact exists; too broad a description will create the appearance of less market power than there is."

Mason CJ and Wilson J, Queensland Wire Pty Ltd v BHP (1989) 167 CLR 177

What is the market in which the Abercrombie Terrace café operate in?

Cafes on campus?

Cafes on the Darlington side of campus only?

Café and restaurants in the broader Redfern area?

Food service providers in Sydney more generally?

What is a market?

The market for all walling products generally - i.e. concrete blocks, clay bricks, tiles, glass, plasterboard, etc. or

The market for concrete masonry products only

Boral

Applicant: 'Salomon branded ski boots'

Respondent: 'Ski gear'

Court held: 'Ski boots'

Determining the extent of competition in a market

Number and size distribution of sellers in the market - degree of market concentration

The height of barriers to entry, that is the ease with which new firms may enter and secure a viable market

The extent to which the products of the industry are characterised by extreme product differentiation and sales promotion

The character of 'vertical relationships with customers' and with suppliers and the extent of vertical integration

Nature of any formal, stable & fundamental arrangements between firms which restrict their ability to function as independent entities

Firm A has 60% market share

Firm B has 25%

Firm C has 15%

Part IV of the Competition and Consumer Act

S45: Anti-competitive conduct generally

45D: Primary and secondary boycotts

46: Misuse of market power

47: Exclusive dealing

48: Resale price maintenance

50: Mergers and acquisitions

Per se offences

The "substantial lessening of competition" test discussed earlier applies to many restrictive trade practices

However: some practices are prohibited per se

This means that you don't have to prove that the conduct lessened competition, you just have to prove that the conduct in question took place

Examples include cartel conduct, price fixing, resale price maintenance, etc.

What is the effect of prohibiting something per se?

Types of conduct covered

These take place between firms at the same level of the supply chain

Include collusive conduct - price fixing, boycotts, etc.

Take place between firms at different levels of the supply chain

Exclusive dealing, resale price maintenance, etc.

Conduct which affects the structure and competitiveness of markets through things like mergers, misuse of substantial market power (e.g. monopolies, etc.)

Cartel conduct

Section 44ZZRA

A corporation must not make or given effect to a contract, arrangement or understanding that contains a cartel provision

Corporation

Make or give effect to

Contract, arrangement or understanding

Cartel provision

A cartel provision is a provision relating to:

Price fixing

Restricting outputs in production and supply

Allocating customers, suppliers or territories, or

Bid-rigging

By parties that are, or would otherwise be, in competition with each other

Few producers

High entry barriers at production and retail level

Inelastic product demand

Uniform product

Readily available price information - in terms of roadside signs, etc.

TPC v Service Station Association Ltd [1993] FCA 405: failed to prove price fixing in the context of petrol station prices

Cartel conduct - ACCC v Visy [2007] FCA 1617

Market for corrugated fibreboard packaging in Australia dominated by Visy and Amcor

Significant losses incurred by both because of a pricewar

Price war ended by 'negotiations' in Melbourne hotels between top executives - to retain respective market shares and not enter into contracts with each other's principal customers

Operated for 5 years and only accidentally exposed

"Every day every man, woman and child in Australia would use or consume something that at some stage has been transported in a cardboard box. The cartel in this case therefore had the potential for the widest possible effect."

"The cartel here went on for almost 5 years. Had it not been accidentally exposed, it would probably still be flourishing. It was run from the highest level in Visy."

$36 million penalty imposed on Visy (and $2 million penalties on Visy executives)

Amcor escaped penalty under the ACCC's Immunity Policy

ACCC Immunity policy

ACCC is unaware of the cartel

Corporation is the first to disclose

Corporation is not a "clear leader"

Corporation ceases involvement

Corporation provides full disclosure

Cartel conduct - Price fixing

Arrangements between competitors to fix prices at a certain amount

This may be to artificially generate monopoly profits or to lock out competitors

TPC v TNT Australia (1996) ATPR 41-375:

TNT entered into an arrangement with two other firms to fix prices by, amongst other things, deliberately misquoting prices to customers. If a customer of TNT's requested a quote from one of the other firms, the other firmed agreed to supply a higher-priced quote such as to preserve TNT's business. In return TNT agreed to do the same regarding the other firms' customers

What about keeping prices low? Is that still price fixing?

Primary boycotts (exclusionary provisions)

Section 45D of the ACT

Where firms agree to deliberately restrict the supply of goods or services to a particular person or class of persons

News Limited v Australian Rugby League (1996) ATPR 41-375

News Limited established the "Super League", a rival football league to the Australian Rugby League (ARL). Clubs intending to join the ARL were required to sign a 'loyalty agreement' agreeing not to participate in any other rival league for a period of five years after the agreement had been signed. News Limited alleged the provisions were anti-competitive

Held that these were exclusionary provisions and therefore unenforceable

Secondary boycotts

Leon Laidley v Transport Worker's Union [1980] FCA 15

LL was a fuel distributor for Amoco, a petrol company

TWU members employed by Amoco commenced strike action to prevent delivery of fuel to LL

Held that the dominant purpose of this action was to cause substantial loss or damage to LL and not to protest working conditions, and that this constituted a secondary boycott

Exclusive dealing arrangements

Supply of a refrigerated ice cream cabinet on the condition it was used exclusively for the supplier's product and no others

Held to exclusive dealing

Resale price maintenance

Section 48

Prohibits suppliers from specifying a price below which goods cannot be resold or supplied

Undermine their reputation for being 'expensive'

Does it substantially lessen competition?

No big problem

Inducing retailers not to sell Jurlique products at prices less than those specified

Withholding supply of products to retailers that did sell below the prices specified

Making statements to retailers that were likely to be interpreted as setting prices below which products were not to be sold

Inducing resale price maintenance

"Would you please note that all future advertisements for Sharp electronic calculators should show your uniform retail price"

"Westco Motors as with other Mazda Distributions throughout Australia have spent many thousands of dollars to project an image of quality over the years and do not intend to have this standard"

"If you entertain the idea of discounting the product, I would find a million and one ways of stopping supply"

"We urge you in the strongest possible terms to maintain your suggested retail price"

Merges

Section 50

Prohibited if direct or indirect acquisition of shares or assets

Having effect or likely effect of substantially lessening competition in a substantial market

ACCC merger guidelines incorporate a market concentration test as a filter

Informal and formal clearance procedures

Authorisation on public benefit grounds

Misuse of market power

Section 46:

A corporation that has a substantial degree of power in a market shall not have advantage of that power for the purpose of:

Eliminating or substantially damaging a competitor of the corporation

Preventing the entry of a person into that or any market, or

Deterring or preventing a person from engaging in competitive conduct in that, or any other market

Substantial degree of power (threshold)

Taking advantage for power (predation)

Damage, prevent entry or deter from engaging in competitive conduct

Whether the conduct adversely affects the competitiveness process in the market

Whether the conduct adversely affects consumers or users of goods/services in terms of price, quality, availability, choice or convenience

Whether the conduct raises the cost of entry into a market or prevents or hinders potential competitors from entering the market

Whether the conduct can be justified as efficiency or the desire to engage in genuine competitive rivalry

Predatory pricing

Protection of "competition" not "competitors"

Difficulty of distinguishing predatory pricing from aggressive competitive conduct

Market share not market power

'substantial below cost pricing' not 'taking advantage' test

Misuse of substantial market share

Section 46 (1AA)

A corporation that has a substantial share of a market must not supply or offer to supply goods or services for a sustained period at a price that is less than the relevant cost to the corporation of supplying such goods or services, for the purpose of:

Eliminating or substantially damaging a competitor of the corporation or of a body corporate that is related to the corporation in that or any other market;

Preventing the entry of a person into that or any other market;

Deterring or preventing a person from engaging in competitive conduct in that or any other market

Harper Review reform recommendations

"taking advantage for the purpose of…' - subjective

"effect of substantially lessening competition" - objective

Still to come…

Changes to the definition of a cartel to add a "within trade or commerce" requirement

Renaming of the wonderful s44ZZRA-44ZZRV to be part of a new section 45AA - 45AU

Adding a "substantially lessen competition" test to third line forcing provisions

Removal of a separate definition of 'exclusionary provisions' - consolidation of these kinds of arrangements within the existing law

Remedies, administration and enforcement

Administration of Part IV

The Australian Competition and Consumer Commission

The Australian Competition Tribunal

The National Competition Council

The Federal Court

Remedies

Damages (s82)

'such orders… as [the court] thinks appropriate 'to compensate for, or prevent, loss or damage' (s87)

Injunctions (Except in the case of mergers (s80)

Civil pecuniary penalties (s76)

Criminal penalties for cartel conduct (Part IV Div 1)

Corrective advertising orders (s86C)

Adverse publicity orders (s86D)

Injunctions (s80)

Divestiture orders in the case of mergers (s81)

Enforcement of written undertakings (s87B)

Declarations (s.163A)

Pecuniary penalties

$10 million

Tree times the value of the benefit or indirectly attributable to the act or omission; or where the benefit cannot be valued

10% of the turnover the company in the 12 months preceding the act or omission

Imprisonment for serious cartel offences

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adjudicators · 7 years ago

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This tutorial focuses on a variety of legal remedies relating to the general area of misleading, unconscionable and unfair conduct. Statutory provisions from the Australian Consumer Law will be considered along with common law remedies.

What is the difference between equitable unconscionability and statutory unconscionability?

Equitable unconscionability

s20: Unconscionable conduct

A person must not,

In trade or commerce,

Engage in conduct

That is unconscionable within the meaning of the unwritten law, from time to time, of the States and Territories

Statutory unconscionability

s21: Statutory Unconscionability

A person must not,

In trade or commerce,

In connection with the supply or possible supply or acquisition or possible acquisition of

Goods or services to a person (other than a listed public company),

Engage in conduct that is, in all the circumstances

Unconscionable

The role of equitable doctrine is limited to private i.e. non-business conduct beyond the scope of the ACL

Statutory unconscionability enacts a more liberal and versatile unconscionability regime freed from the special disadvantage limitations of the equitable doctrine; it prohibits conduct in trade and commerce that is "in all circumstances, unreasonable"

What is the difference between unconscionable and unfair conduct?

Unconscionable conduct is generally understood to mean conduct which is so harsh that it goes against good conscience; more than simply unfair, must be against conscience as judged against the norms of society

Unfair conduct just means inequitable conduct; one side might have more power than the other

Amadio case

What is the appropriate standard for assessing unconscionability?

Relative bargaining strength of the parties

Whether any conditions were imposed on the weak party that were not reasonably necessary to protect the legitimate interests of the stronger party

Whether the weaker party could understand the documentation used

The use of undue influence, pressure or unfair tactics by the stronger party

The requirements of applicable industry costs

The willingness of the stronger party to negotiate

The extent to which the parties acted in good faith

Any other factor it thinks is relevant

In what circumstances will a failure to disclose information amount to misleading conduct?

Where the consumer would expect certain information to be disclosed about a product and service and it is not, such as safety requirements or warnings

Does s18 impose liability in respect of opinion as well as statements of fact?

Yes if there are no reasonable grounds but they have relied on it (induce conduct)

Or if you know the information you are relying on is false

If you do not care if the information the opinion is based on is true or false

Is a person who merely relays or passes on misleading conduct from another source liable under s18?

Serious or business matter

No, because the person assumes what they were told to be true

What effects do exclusion clauses, acknowledgements and disclaimers have in an s18 action?

Exclusion clauses, exemption clauses, disclaimers or risk warnings are not always effective in excluding liability of the person or entity relying on it

S18 limits the degree the supplier can rely on the exclusion clause

Problem question activity

Misleading to the consumer

Just has to be LIKELY to mislead, not GOING to mislead

S18 Rule

INXS case

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adjudicators · 7 years ago

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Overview

Business practices

Misleading or deceptive conduct

Unconscionable conduct

Unfair contract terms

S18: Misleading or deceptive conduct

Old s52

Same jurisprudence

Examples

A businessman seeking damages in respect of advice re borrowing overseas (Chiarabaglio v Westpac Banking Corporation)

An Australian restaurant seeking to restrain the use of a similar name by an American restaurant chain (Taco Bell case)

A toothpaste manufacturer was prevented by a rival from continuing an ad campaign which included unsubstantial claims (Colgate Palmolive v Rexona)

Overlap with other legislation

COMPETITION AND CONSUMER ACT 2010 - SECTION 131

Application of the Australian Consumer Law in relation to corporations etc.

(1) Schedule 2 applies as a law of the Commonwealth to the conduct of corporations, and in relation to contraventions of Chapter 2, 3 or 4 or Schedule 2 by corporations

COMPETITION AND CONSUMER ACT 2010 - SECTION 131A

Division does not apply to financial services

(1) Despite section 131, this Division does not apply…to the supply, or possible supply, or services that are financial services, or of financial products

Australian Securities and Investments Commission Act 2001 (Cth)

s. 12DA

(1) A person must not, in trade or commerce, engage in conduct in relation to financial services that is misleading or deceptive or is likely to mislead or deceive

s. 12BAB

… a person provides a financial services if they:

(a) provide financial product advice…; or

(b) deal in a financial product; or

(d) operate a registered scheme; or

(e) provide a custodial or depository service; or

(f) operate a financial market…or cleaning and settlement facility

(g) provide a service that is otherwise supplied in relation to a financial product

Corporations Act 2001 s1041H

(1) A person must not, in this jurisdiction, engage in conduct, in relation to a financial product or a financial service, that is misleading or deceptive or is likely to mislead or deceive

Note 1: Failure to comply with this subsection is not an offence

Note 2: Failure to comply with this subsection may lead to civil liability under section 1041I. For limits on, and relief from, liability under that section, see Division 4

Which provision?

Misleading or deceptive conduct

In trade or commerce

NOT in relation to supply of financial services or financial products

S18 ACL

Difficult to exclude

Misleading or deceptive conduct in relation to supply of financial services or financial products?

ASIC Act

Corporations Act

Trade or commerce requirement

Broader definitions of "financial service" and "financial product"

See Pt 7.1 definitions - narrower

May be excluded by contract

Overlap with director's duties

Judicial comment on this complex legislative framework

Winecarribee Shire Council v Lehman Brothers Australian Ltd (in Liq) [2012] FCA 1028. Rares J at [947] - [948]

For many years all one had to know was the elegantly simple s 52(1) of the Trade Practices Act 1974 (Cth) prohibited a corporation from engaging in conduct, in trade or commerce, that was misleading or deceptive or likely to mislead to deceive… Now the community and the Courts must grapple with a labyrinth of statues, all prohibiting such conduct, in relatively general fields (such as s 18 of Sch 2 of the Competition and Consumers Act 2010 (Cth)… and also in particular fields, such as s 1041H(1) of the Corporations Act… Since the end result of this legislative morass seems to be the same, it is difficult to discern why the public, their lawyers (if they can afford them) and the Courts must waste their time turning up and construing which of these statutes applies to the particular circumstance… Why is there a difference? Why does a court have to waste its time wading through this legislative porridge to work out which one or ones of these provisions apply even though it is likely that the end result will be the same?...

s18: elements

Advertising

Unfair competition

Pre-contractual misrepresentation

'In trade or commerce'

Question of construction "arises from the requirement that the conduct to which the section refers to be "in" trade or commerce"

Majority: "The phrase "in trade or commerce" in s52 has a restrictive operation

Religious beliefs

Political Communications

Public health and educational communications

But commercial commentary?

"Engage in conduct"

Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd (1982) 149 CLR 191

Silence

Failure to disclose information where the circumstances were such that ordinary members of the class at which conduct was directed would reasonably expect the other party to divulge that information could be misleading or deceptive

Demagogue Pty Ltd v Ramensky (1992) 39 FLR 31

Henjo v Collins Marrickville (1988) 79 ALR 83

McBridge v Christie's Australia Pty Ltd [2014] NSWSC 1729

Albert Tucker's Faun and Parrot

Representations by vendor to Christie's that painting was an Albert Tucker and no concerns about attribution

No knowledge of forgery at time of sale, but Christie's had real concerns shortly thereafter - remained silent

Christie's, vendor and agent for purchaser all engaged in misleading and deceptive conduct

Christie's provided refund if forgery within 5 years - misleading or deceptive to remain silent in the circumstances

Christie's not a mere conduit

Conduct or conduit?

Yorke v Lucas at 666

Disclaimers

Poulet Frais Pty Ltd v The Silver Fox Company Pty Ltd FCAFC 131

'misleading or deceptive'

Dictionary approach

Tautologous

Induces or is capable of inducing error

No requirement for deceit

Who is mislead?

"Although it is true, as has often been said, that ordinarily a class of consumers may include the inexperienced as well as the experienced, and the gullible as well as the astute, the section must in my opinion by regarded as contemplating the effect of the conduct on reasonable members of the class. The heavy burdens which the section creates cannot have been intended to be imposed for the benefit of persons who fail to take reasonable care of their own interests"

INXS case

Hutchence v South Sea Bubble Co Pty Ltd [1986] FCA 42

Identity relevant section of public

Wilcox J in INXS case:

[T]he section of the public likely to be affected by the sale of T-shirts bearing the names of, or symbols relating to INXS is the body of people who enjoy the music of that group: the people who attend their concerts, purchase their records and/or listen to their music on the radio or on television. Bearing in mind the notorious fact that the proportion of persons in any given age group who are rock enthusiasts tends to diminish with increasing age, it is reasonable to assume that a major proportion of INXS followers are teenagers or persons in their twenties. There is no reason to assume otherwise than that in intelligence and educational attainments INXS followers will represent a fair cross-section of the community

Intent?

"A corporation which has acted honestly and reasonably may therefore nevertheless be rendered liable to be restrained by injunction, and to pay damages, if its conduct has in fact mislead or deceived or is likely to mislead or deceive"

Confusion? Wonderment?

More than conduction (Big Mac case) McWilliam's Wines Pty Ltd v McDonald's System of Australia Pty Ltd (1980) 49 FLR 455

Taco Co of Australia Inc v Taco Bell Pty Ltd (1982) 42 ALR 117

INXS case

Or only reasonable members?

Nike case; Parkdale v Puxu

Evidence useful, but not required

Hornsby Building Information Centre

Conduct directed at identified persons?

E.g. pre-contractual representations

Butcher v Lachlan Elder Realty

Butcher v Lachlan Elder Realty at 50

Predictions, opinions, forecasts

S4(1) ACL

Evidentiary provision

A representation as to a future matter will be taken to be misleading or deceptive unless the maker of the representation can prove that he or she had reasonable grounds for making the representation

S4(2): Onus on maker of representation to prove that they had "reasonable grounds"

Liability issues:

Manufacture or retailer?

Company or director?

One or many?

Unconscionable Conduct - ss20-22

Two prohibitions

s20 - Common law unconscionability

ss21, 22 - Statutory unconscionability

Unconscionable?

Per Gleeson CJ in ACCC v CG Berbatis Holdings Pty Ltd [2003] HCA 18

(Shorter Oxford Dictionary, relied on by the Court in Qantas Airways Ltd v Camera (1996) ATPR 41-487; ACCC v CG Berbatis Holdings Pty Ltd (No 2) [2000] FCA 2; and Hurley v McDonald's Australia Ltd (2000) ATPR 41-741)

s20: Unconscionable conduct

A person must not,

In trade or commerce,

Engage in conduct

That is unconscionable within the meaning of the unwritten law, from time to time, of the States and Territories

Commercial Bank of Australia v Amadio (1983) 151 CLR 447

Son translates terms between parents and CBA bank

Parents thought they were signing a limited guarantee but was actually unlimited

CBA bank comes to Amadio seizing their house

Amadio takes to court and wins - special disadvantage

Common Law

Special disadvantage

Knowingly exploited by other party

Kakavas v Crown Melbourne Ltd [2013] HCA 25

Problem gambler - previously excluded by Crown

Permitted to return having provided assurances of being cured

Gambled $1.5 billion in one year (Lost $20.5m)

s21: Statutory Unconscionability

A person must not,

In trade or commerce,

In connection with the supply or possible supply or acquisition or possible acquisition of

Goods or services to a person (other than a listed public company),

Engage in conduct that is, in all the circumstances

Unconscionable

Why s21? s21(4) and…

Same as common law?

s21(4) It is the intention of the Parliament that: (a) this section is not limited by the unwritten law relating to unconscionable conduct; and

s21(4) and…

(i) the terms of the contract

(ii) the manner in which and the extent to which the contract is carried out;

And is not limited to consideration of the circumstances relating to formation of the contract

Senate Estimates Committee

Statement by Rod Sims - 13 February 2013

Relationship of s21 and s46

Difficulties of evidence

ACCC v Coles

Providing misleading information to suppliers about the savings and value to them from the changes Coles had made;

Using undue influence and unfair tactics against suppliers to obtain payments of the rebate;

Taking advantage of its superior bargaining position by, amongst other things, seeking payments when it had no legitimate basis for seeking them; and

Requiring those suppliers to agree to the ongoing ARC rebate without providing them with sufficient time to assess the value, if any, of the purported benefits of the ARC program to their small business

Consent orders: 22/12/14

Pecuniary penalty: $10 million

Court enforceable undertakings - system of redress for suppliers

Gordon J:

"Coles' misconduct was serious, deliberate and repeated. Coles misused its bargaining power. Its conduct was 'not done in good conscience'. It was contrary to conscience. Coles treated its suppliers in a manner not consistent with acceptable busness and social standards which apply to commercial dealings. Coles demanded payments from suppliers to which it was not entitled by threatening harm to the suppliers that did not comply with the demand. Coles withheld money from suppliers it had no right to withhold."

"Coles' practices, demands and threats were deliberate, orchestrated and relentless."

And now…

December 2015 - ACCC takes action against Woolworths

Unconscionable: ACCC v Lux Pty Ltd [2004] FCA 926

'The word unconscionable is not a term of art. IT is not limited to traditional equitable or common law notions of unconscionability: Australian Competition & Consumer Commission v Simply No-Knead (Franchising) Pty Ltd)… It bears its ordinary meaning of 'showing no regard for conscience' irrenconcilable with what is right or reasonable': Australian Competition & Consumer Commission v Samton Holdings Pty Ltd… What is required is 'serious misconduct or something clearly unfair or unreasonable': Hurley at [19] - [20]. It will be relevant whether advantage is taken of an innocent party who, though not deprived of an independent and voluntary will, is unable to make a worthwhile judgement as to what is in his or her best interests: Commercial Bank of Australia Ltd v Amadio' [at 98]

Westpac v Sugden

Whether the customer is able to understand the documentation;

Whether duress, undue influence or unfair tactics used; and

The amount for which consumer could have acquired identical goods or services

Statutory Unconscionability

ACCC v Lux Pty Ltd [2004] FCA 926

Whether conduct complained of is consistent with conduct in other similar business transactions;

+ h. the requires of any industry codes

E.g. Franchising Code of Conduct - Part IVB

Additional factors - s22

The extent of any failure to disclose intended conduct which may affect customer, or risks to customer;

Willingness to negotiate; and

The terms and conditions of the contract; and

Conduct in complying with the terms and conditions of the contract; and

Any conduct engaged in, in connection with their commercial relationship, after they entered into the contract; and

ACCC v Simply No-Knead (Franchising) Pty Ltd [2004] FCA 1365

The imposition of undue pressure and unfair tactics;

A failure to negotiate

A lack of good faith; and

A failure to comply with an applicable industry code of conduct (the Franchising Code of Conduct in this case)

Conduct overlap

Unfair Contract Terms

s23

The term is unfair; and

The contract is a standard form contract

The contract continues to bind the parties if it is capable of operating without the unfair term

Consumer contract?

A supply of goods or services; or

A sale or grant of an interest in land

To any individual whose acquisition of the goods, services or interest is wholly or predominantly for personal, domestic or household use or consumption

Standard form contract? s27

Bargaining power relating to the transaction;

Contract prepared by one party before any discussion relating to the transaction occurred between the parties

Whether another party was, in effect, required either to accept or reject the terms of the contract

Whether another party was given an effective opportunity to negotiate the terms of the contract

Whether the terms of the contract take into account the specific characteristics of another party or the particular transaction

Any other matter prescribed by the regulations

Unfair? s24

It would cause a significant imbalance in the parties' rights and obligations arising under the contract; and

It is not reasonably necessary in order to protect the legitimate interests of the party who would be advantaged by the term; and

It would cause detriment (whether financial or otherwise) to a party if it were to be applied or relied on

The extent to which the term is transparent;

The contract as whole

Expressed in reasonably plain language; and

Legible; and

Presented clearly; and

Readily available to any party affected by the term

What might be unfair terms? - s25

Permit the supplier to unilaterally vary the terms of the contract;

Prevent the consumer from cancelling a contract;

Require the payment of fees when the service is not provided;

Exclude liability for harm resulting from the supplier's or its agents' actions'

Let the supplier supply goods or services that are not those contracted and paid for by the consumer;

Let only the supplier decide whether to renew or not to renew the contract;

Penalise only the consumer for breaches of the terms of the contract

Permit the supplier to change the price of the goods or services contracted for without allowing the consumer to terminate the contract

Permit the supplier to unilaterally determine whether a breach of the contract has occurred or to interpret the contract's meaning;

Allow the supplier to assign the contract to the consumer's detriment, without the consumer's consent;

Purport to limit the consumer's right to take legal action against the supplier;

Limit the evidence that the consumer is permitted to use in legal proceedings based on the contract;

Impose the evidential burden on the consumer in legal proceedings;

Do not permit refunds to consumers when the goods or services are not provided, or which apply conditions to the way in which consumers are refunded;

Require consumers who breach a contract term or terminate early to pay penalties, in the form of specific additional payments, additional interest or indemnity legal costs, which do not reflect the suppliers' reasonable costs; and

Deem something as a fact or that something will be a fact, such as an acknowledgement that certain information has been provided to the consumer prior to the agreement being made, regardless of whether or not it was

ACCC v Bytecard

Unilateral variation

Consumer to indemnify NetSpeed (no corresponding for NetSpeed)

NetSpeed terminate at any time; customer can only terminate on conditions

ACCC review

Airlines, telecommunications, fitness and vehicle rental industries

Online traders and travel agents

Industry review outcomes

Future directions? B2B contracts?

Consultation paper released on 23 May 2014

Unfair contract terms are being included in standard form contracts involving small businesses, causing detriment throughout the community. The Australian Government wishes to protect small businesses by providing them with the same protections available to consumers

The Treasury is undertaking a consultation process on behalf of Consumer Affairs Australia and New Zealand. We would appreciate your feedback to help us put in place adequate protections for small business

20 March 2015 - in principle decision to extent protection to small businesses

From 12 November 2016

Employs less than 20 people, including casual employees employed on a regular and systematic basis

Particular issues

Half truths, silence and non-disclosure

Promises, predictions, forecasts representations as to the future

Opinions

Relaying false information

Exclusions, acknowledgements and disclaimers

Reliance

0 notes

adjudicators · 7 years ago

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This tutorial is the second, and last in a series on the topic of negligence, and will focus on some common issues that arise in negligence claims, including economic loss, negligent misstatement and more.

Reasonable foreseeability - crucial but not sufficient by itself

The defendant need only take precautions against foreseeable risks

Liability for negligence arises when there is a failure to take precautions against the reasonably foreseeable risk of causing harm. In other words, tort law only requires people to take reasonable precautions against risk that are reasonably foreseeable

Donoghue v Stevenson

Proximity

Circumstantial

Physical

Causal

Must be legal proximity (a legal relationship between the parties from which the law will attribute a duty of care)

Lord Atkin's neighbour principle

Earlier authorities required a 'relationship of proximity' between the parties in addition to the foreseeability of harm

Lmimited the first criteria of foreseeability

Bryan v Maloney - decided according to the doctrine of proximity

The doctrine of proximity was then rejected in Australia, by the High Court in Sullivan v Moody

So while the former case has not been overruled per se one of the doctrines on which it was decided has been rejected

Vulnerability

The vulnerability of the plaintiff

Out of the plaintiff's control - inability to protect themselves from the consequences of someone else

What is "economic loss" and why was the law reluctant to compensate for it?

Negligent misstatement

Loss flowing from 3rd party property damage (Perre)

"Duty of given scope" - may be unfair

Indeterminability of liability - ripple effect can go on forever - don't want to open floodgates

Can a duty of care in relation to negligent misstatement be excluded? If so, then how?

A special relationship exists between the parties

The defendant accepted responsibility in the circumstances of the advice

The plaintiff relied upon the misrepresentation

Hedley Bryne & Co Ltd v Heller & Partners Ltd [1964] AC 465

Court found:

That the relationship between the parties was "sufficiently proximate" - duty of care established

Reasonable for them to have known that information provided would have been relied upon

"Special relationship" proven

BUT, on the facts, the disclaimer was sufficient to discharge the duty created, so they lost

Problem question

Special relationship

Go through the steps

Two step test

Negligent misstatement

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adjudicators · 7 years ago

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Issue: Protect consumers?

Caveat emptor - let the buyer beware

Contract

Tort

Consumer movement

NSW Sale of Goods Act 1923

Fair Trading Act 1987

Contracts Review Act 1980

Consumer Credit Act 1995

Motor Dealers Act 1974

Why State based legislation

(xx.) Foreign corporations, and trading or financial corporations formed within the limits of the Commonwealth

National Protect: Trade Practices Act 1974

In consumer transactions unfair practices are widespread. The existing law is still founded on the principle known as caveat emptor – meaning ‘let the buyer beware.’ That principle may have been appropriate for transactions conducted in village markets. It has ceased to be appropriate as a general rule. Now the marketing of goods and services is conducted on an organised basis and by trained business executives. The untrained consumer is no match for the businessman who attempts to persuade the consumer to buy goods or services on terms and conditions suitable to the vendor. The consumer needs protection by the law and this Bill will provide such protection.”

Commonwealth Parliamentary debates Senate vol 57 pp1013-14.

Commonwealth: Trade Practices Act 1974 (Cth)

Implying terms into contracts to protect consumers

Reflects Sale of Goods legislation

Some statutory rights against manufacturers

Avoids privity issues

Corporations / Non-Corporates Governments

Issue: National protection? One law for all?

Fair Trading legislation

Divergence in state legislation - e.g. Victoria's unilateral introduction of unfair contract terms

http://www.pc.gov.au/projects/inquiry/consumer/docs/finalreport

Issue: Path to National law?

Referral of power by states - s51 (xxxvii)

States: NO

Australian Consumer Law (ACL) - Schedule Two, Competition and Consumer Act 2010 (Cth)

New law, agreed by COAG

Overview of ACL

Machinery provisions, definitions, etc.

Misleading and deceptive conduct (s52); Unconscionable conduct (Part IVA); Unfair contract terms (New - cf Victoria)

Consumer guarantees (Part V Div 2/2A); Product Safety (Part VA); Product liability (Part V Div 1A)

For breach of Chapter 3 (Part VC)

(Part VI)

Consumer Guarantees

Subdivision A -- Guarantees relating to the supply of goods

Subdivision B - Guarantees relating to the supply of services

Subdivision C -- Guarantees not to be excluded etc. by contract

Subdivision D - Miscellaneous

Overview

http://www.abc.net.au/tv/thecheckout/clips/#

Returning goods

Subdivision A: Goods

51 - title

52 - undisturbed possession

53 - undisclosed securities

54 - acceptable quality

55 - fitness for any disclosed purpose

56 - supply of goods by description

57 - supply of goods by sample

58 - repairs and spare parts

59 - express warranties

Subdivision B: Services

Due care and skill - s 60

Particular purpose - s 61 (1)

Achieving a desired result - s 61 (2)

Reasonable time to supply - s 62

Overview

http://www.abc.net.au/tv/thecheckout/clips/#

Services

S56: Correspondence with description

(a) a person supplies, in trade or commerce, goods by description to a consumer; and

(b) the supply does not occur by way of sale by action; there is a guarantee that the goods correspond with the description

How to read legislation

Legislation

Case law

S56(1) - threshold elements

Interpretation legislation

s2 - "and includes any business or professional activity (whether or not carried on for profit)

Consumer s3

(i) $40 000; or

(ii) if a greater amount is prescribed for the purposes of this paragraph - that greater amount; or

(i) in the course of a process of production or manufacture; or

(ii) in the course of repairing or treating other goods or fixtures on land

Presumption

(10) If it is alleged in any proceeding under this Schedule, or in any other proceeding in respect of a matter arising under this Schedule, that a person was a consumer in relation to particular goods or services, it is presumed, unless the contrary is established, that the person was a consumer in relation to those goods or services

'Ordinarily acquired for personal, domestic or household use or consumption'…

Bunnings Group Ltd v Laminex Group Ltd (2006) 153 FCR 479

Crago v Multiquip Pty Ltd (1998) ATPR 41-620

Carpet Call Pty Ltd v Chan (1987) ATPR (Digest) 46-025

S56 (1) elements

Person

Supplies

Trade or commerce

Goods

By description

Consumer

No auction

THEN: guarantee of correspondence with description

Supply/correspondence with description?

S56 is concerned with identity - not quality

S54: acceptance quality

(a) a person supplies, in trade or commerce, goods to a consumer; and

(b) the supply does not occur by way of sale by auction; there is a guarantee that the goods are of acceptable quality

(a) fit for all the purposes for which goods of that kind are commonly supplied; and

(b) acceptable in appearance and finish; and

(d) safe; and

(e) durable;

(a) the nature of the goods; and

(b) the price of the goods (if relevant); and

(d) any representation made about the goods by the supplier or manufacturer of the goods; and

(e) any other relevant circumstances relating to the supply of the goods

Acceptable Quality

'for for all the purposes'

Rasell v Cavalier Marketing (Australia) Pty Ltd (1991) ATPR 41-152

Medtel v Courtney [2003] FCAFC 151

S55: Fitness for purpose

(a) a person (the supplier) supplies, in trade or commerce, goods to a consumer; and

(b) the supply does not occur by way of sale by auction; there is a guarantee that the goods are reasonably fit for any disclosed purpose, and for any purpose for which the supplier represents that they are reasonably fit

(i) the supplier; or

(ii) a person by whom any prior negotiations or arrangements in relation to the acquisition of the goods were conducted or made; or

Disclosure of purpose? S55(2)

Carpet Call Pty Ltd v Chan (187) ATRP 46-025

Grant v Australian Knitting Mills (1933) 50 CLR 387

Reliance? Reasonable reliance? S55(3)

Graham Barclay Oysters v Ryan [2000] FCA 1099

Remedies - ACL Part 5-4

Definition s260

Reject goods

Compensation/damages

(i) have the failure remedied and, by action against the supplier, recover all reasonable costs incurred in having the failure remedied; or

(ii) notify the supplier that the consumer rejects the goods and then compensation/damages

Exclusion of guarantees?

Interaction with law of false or misleading representations - e.g. S29(1)(m)

Examples of breach

"This warranty is given in lieu of all other conditions and warranties, express or implied which might otherwise be binding on the company"

"The company accepts no responsibility for loss or damage through any cause whatsoever"

"No refunds"

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adjudicators · 7 years ago

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This tutorial is the first in a series on the topic of negligence, and will introduce students to the concept of the duty of care through both case reading and problem-based exercises.

With reference to relevant case law and the Civil Liability Act (NSW), explain the concept of the ‘duty of care’ and its significance to the tort of negligence.

Le Leivre v Gould (1893)

Physical

Circumstantial

Causal - relationship between the action taken and the outcome

5B General principles

(1) A person is not negligent in failing to take precautions against a risk of harm unless:

(a) the risk was foreseeable (that is, it is a risk of which the person knew or ought to have known), and

(b) the risk was not insignificant, and

(2) In determining whether a reasonable person would have taken precautions against a risk of harm, the court is to consider the following (amongst other relevant things):

(a) the probability that the harm would occur if care were not taken,

(b) the likely seriousness of the harm,

(d) the social utility of the activity that creates the risk of harm.

5C Other principles

In proceedings relating to liability for negligence:

(a) the burden of taking precautions to avoid a risk of harm includes the burden of taking precautions to avoid similar risks of harm for which the person may be responsible, and

(b) the fact that a risk of harm could have been avoided by doing something in a different way does not of itself give rise to or affect liability for the way in which the thing was done, and

(c) the subsequent taking of action that would (had the action been taken earlier) have avoided a risk of harm does not of itself give rise to or affect liability in respect of the risk and does not of itself constitute an admission of liability in connection with the risk.

Case reading activity

Adeels Palace Pty Ltd v Moubarak [2009] HCA 48

Was a duty of care owed?

Adeels Palace owed each plaintiff a duty to take reasonable care to prevent injury to patrons from the violent, quarrelsome or disorderly conduct of other persons (as required by the Liquor Act).

Para 25. Several considerations set the present case apart from Modbury and point to the conclusion that Adeels Palace owed each plaintiff a relevant duty of care. First, the complaint that was made in these cases was that the occupier of premises failed to control access to, or continued presence on, its premises[15]. Secondly, the premises concerned were licensed premises where liquor was sold. They were, therefore, premises where it is and was well recognised that care must be taken lest, through misuse and abuse of liquor, "harm [arise] from violence and other anti‑social behaviour"[16]. And thirdly, the particular duty said to have rested on the occupier of the premises (who was the operator of the business that was conducted on the premises) is a duty to take reasonable care to prevent or hinder the occurrence of events which, under the Liquor Act, the licensee was bound to prevent occurring – violent, quarrelsome or disorderly conduct.

What is the ratio decidendi of this case in relation to duty of care?

Adeels Palace did not breach this duty. Unless the risk to be foreseen was a risk of a kind that called for, as a matter of reasonable precaution, the presence or physical authority of bouncers or crowd controllers to deal with it safely, failure to provide security of that kind would not be a breach of the relevant duty of care. The court noted that there was no finding at trial or in the Court of Appeal, that a risk of that kind should have been foreseen.

Adeels Palace owed each plaintiff a duty to take reasonable care to prevent injury to patrons from the violent, quarrelsome or disorderly conduct of other persons. The duty is consistent with the duty imposed by statute upon the licensee and which was a duty enforceable by criminal processes.

What circumstances are relevant to the question of whether there is a duty of care in such cases?

Modbury

How was the issue of causation resolved?

Even if a breach of duty had been established, the alleged negligence of Adeels Palace was not causally connected to the injuries sustained: The absence of security personnel at Adeels Palace on the night the plaintiffs were shot was not a necessary condition of the occurrence of the harm to either plaintiff.

Next it is necessary to observe that the first of the two elements identified in s 5D(1) (factual causation) is determined by the "but for" test: but for the negligent act or omission, would the harm have occurred?

Even if the presence of security personnel at the door of the restaurant might have deterred or prevented the person who shot the plaintiffs from returning to the restaurant, and even if security personnel on the floor of the restaurant might have been able to intervene in the incident that broke into fighting in time to prevent injury to anyone, neither is reason enough to conclude that this is an "exceptional case" where responsibility for the harm suffered by the plaintiffs should be imposed on Adeels Palace. To impose that responsibility would not accord with established principles.

Was there a duty of care? Ratio?

Para. 25

Yes

Relevant circumstances?

Distinguish from Modbury on duty of care

Scuffle + NYE (alcohol)

Causation

CLA 5D (1) + (2)

"But for" test

0 notes

adjudicators · 7 years ago

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Negligence law reflects and serves to sustain the life of a community.

Mullender

Revision: Elements of a negligence action

Reasonable foreseeability test - Donoghue v Stevenson

Proximity test (circumstantial, physical or causal) - Jaensch v Coffey

Salient features (policy reasoning) test - Wrongful birth and wrongful life cases

Case Study

Kell v Girl Guides Association of NSW [2014] NSWLC 19:

https://www.caselaw.nsw.gov.au/decision/54dae0bbe4b0aedbe9572ffe

Negligence causing pure economic loss

What is pure economic loss?

Pure economic loss refers to financial loss that is not a result of direct physical injury or property damage and is more commonly associated with business and commercial activities

Courts were initially reluctant to compensate plaintiffs for pure economic loss

This is the function of contract law

The "floodgates" argument

If liability for negligence exists, a thoughtless slip or blunder, the failure to detect a theft or forgery beneath the cover of deceptive entries, may expose accountants to a liability in an indeterminate amount for an indeterminate time to an indeterminate class. The hazards of a business conducted on these terms are so extreme as to enkindle doubt whether a flaw may not exist in the implication of a duty that exposes to these consequences

Cardozo CJ in Ultramares Corp v Touche 174 NE 441

In Tame v NSW [2002] HCA 35, Gleeson CJ explained:

One of the reasons for the rejection of a general rule that one person owes to another a duty to take care not to cause reasonably foreseeable financial harm is that the practical consequence of such a rule would be to impose an intolerable Burdon upon business and private activity

It would place an unreasonable burden upon human activity to require people to anticipate and guard against all kinds of foreseeable financial harm to others that might be a consequence of their acts or omissions

Gofford v Strange Patrick Stevedoring Pty Ltd (2003) 198 ALR 100 at 102 per Gleeson CJ

Relational interests

Negligent misstatements

Negligent statements causing pure economic loss

Hedley Byrne & Co Ltd v Heller & Partners Ltd [1964] AC 465

Issue: whether a duty of care existed

Words are more volatile than deeds. They ttravel fast and far afield. They are used without being expended and take effect in combination with innumerable facts and other words. Yet they are dangerous and can cause vast financial damage.. Damage by negligent acts to persons or property on the other hand is more visible and obvious; its limits are more easily defined.

Hedley Byrne & Co v Heller [1964] AC 465 at 534, per Lord Pearce

A duty of care could arise from a special relationship

If someone possessed of a special skill undertakes quite irrespective of contract to apply that skill for the assistance of another person who relies on such skill, a duty of care will arise (per Lord Morris)

A special relationship exists between the parties

The defendant accepted responsibility in the circumstances of the advice

The plaintiff relied upon the misrepresentation

"For your private use and without responsibility on the part of the bank…[the relevant company] is a respectably constituted company, considered good for its ordinary business engagements. Your figures are larger than we are accustomed to see"

…the primary objective of the law of torts (negligence) was viewed as making reparation for infliction of positive physical harm…

In giving advice, opinions or information AND

As a result of which the representee suffers economic loss

Despite the existence of a contract between the parties

In circumstances where there is a special relationship which underpins a duty of care

What is a "special relationship"?

MLC v Evatt [1968] 122 CLR 556

MLC (an insurance company) gave negligent advice to a policy holder - Evatt

The advice concerned the financial stability of a subsidiary company

The subsidiary company later collapsed which lead to the dispute - whether MLC was liable for Evatt's financial loss

Issue: is there a duty to take care in giving financial advice?

MLC v Evatt, per Barwick CJ

The nature of the subject matter

The occasion of the interchange

The identity and relative position of parties

Shaddock & Associates v Parramatta City Council [1981] HCA 59

MLC v Evatt was applied

Shaddock was in the process of purchasing an investment property

Shaddock sought information from the Council about any future road-opening proposals

The correspondence were made by telephone, and later a certificate completed by the Council was returned to Shaddock's solicitor indicating that there was no such plan

Problem: there was in fact a road-widening proposal, which reduced the value of the property Shaddock purchased

Issue: whether the Council is liable for its advice?

With all respect I find it difficult to see why in principle the duty should be limited to persons whose business or profession includes giving the sort of advice or information sought and to persons claiming to have the same skill and competence as those carrying on such a business or profession, and why it should be not extend to persons who, on a serious occasion, give considered advice or information concerning a business or professional transaction

(Gibbs J in Shaddock)

Significance of Shaddock v Parramatta City Council

Liability arose since the council should have known incorrect advice could cause loss of profit to the owner of the land that would be reduced by the widened road

San Sebastian Pty Ltd v Minister for Environmental Planning (1986) 162 CLR 340

The issue: whether a duty of care was owed?

San Sebastian Pty Ltd v Minister

San Sebastian, at [16]

0 notes