Allan Asher

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*Commissioner Australian Trade Practices Commission

Australia's Trade Practices Act ...as it is, and as it might be...

Allan ASHER*

FOREWORD　　This paper is based on the Trade Practices Commission's publication Summary of the Trade Practices Act, which is a 'plain-language' account of the provisions of that Act.
　　In attempting to describe not only what the Act is, but what it might be, the paper quotes from recommendations of the recent report of the Australian Law Reform Commission entitled Compliance with the Trade Practices Act 1974.
　　Where possible these quotes have been inserted into the text at points corresponding to the section(s) to which they relate.　These quotes can be　identified by the use of a diferent typeface, and where those quotes appear 'the Commission' means the Australian Law Reform Commission.
　　Recommendations which do not fit into the existing Act (for example, because they recommend amendments to a different Act) are listed in an Appendix at the end of the paper.

INTRODUCTION The ActThe Trade Practices Act consists of five major parts:
<>　Part IV deals with anti-competitive practices.
<>　Part IV deals with unconscionable conduct.
<>　Part IV deals with:
・　Division 1unfair practices.
・　Division 1A product safety and information.
・　Division 2conditions and waranties.
・　Division 2A actions against manufacturers importers.
<>　Part IV deals with product liability.
<>　Part IV deals with International liner cargo shipping.
　　Note: Part X not covered in this paper
The Act applies generally to the business and commercial activities of:
・　most corporations;
・　sole traders or partnerships whose activities:
　　　　■　cross State or partnerships whose activities:
　　　　■　take place within a Territory; or
　　　　■　are conducted by telephons or post, or use radio or television (PartV and to the commercial activities of the Commonwealth.

THE TRADE PRACTICES ACT　　The Trade Practices Act is the main instrument of competition and national consumer protection policy in Australlia.　The Act has two broad objectives:
・　to prevent anti-competitive conduct, thereby encouraging competition and efficiency in business, and resulting　in a greater choice for consumers in price, quality and service; and
・　to safeguard the position of consumers in their dealings with producers and sellers.
　　The two main parts of the Act are complementary.
　　Part IV deals with mergers and restrictive trade practices, and is based on two broad principles:
・　that any behaviour which has the purpose or effect of substantially lessening competition in a market should b prohibited; and
・　that put broadly, such behaviour should be able to be authorised when its anti-competitive effects are offset by associated public benefit.
　　However, Part IV is more complex and detailed than that and this summary highlights the key features of the law.
　　Part V deals directly with the interests of consumers (and businesses which qualify as consumers in particular transactions).
　　It is a means of promoting fair competition by protecting consumers' rights, especially the right to full and accurate information when purchasing goods and services.　It provides an important safety net in markets where vigorous competition might tempt some businesses to cut corners to gain a competitive advantagefor example by making misleading claims about a product's value, quality, place of origin or impact on the environment.　Ethical traders also benefit from these provisions.
　　The Act also contains important provisions establishing statutory warranties, dealing with product safety, and prohibiting unconscionable conduct.

THE COMMISSION　　The Trade Practices Commission is a Commonwealth statutory authority responsible for ensuring compliance with Parts IV, IVA, V (Division 1) and VA of the Act.　Division 1A of Part V deals with product safety and bans and is administered by the Federal Bureau of Consumer Affairs.
　　The Commission is the only nationally operating agency dealing generally with competition matters.　In fair trading and consumer protection its role complements that of State and Territory consumer affairs agencies and the Federal Bureau of Consumer Affairs.　Each State and Territory has legislation which substantially mirrors the fair trading provisions of the Commonwealth legislation.　As a result unincorporated traders which do not operate across State boundaries and which are, for constitutional reasons, not covered by the Act must nevertheless meet fair trading requirements.
ALRC 2.17 [There] should be a national scheme of laws that does not depend on the continued efforts of ...　governments to maintain consistency and uniformity ...　the Commission considers that a national scheme of laws that would provide and maintain a consistent standard of consumer protection throughout Australia should be developed The Commission's objectives are to:
・　improve competition and efficiency in markets;
・　foster adherence to fair trading practices in well-informed markets;
・　inform the community at large about the Act and its specific implications for business and consumers; and
・　use Commission resources efficiently and effectively. ALRC 3.4　...[The Commission] recommends that s 28 of the TPA be amended to state that the role of the TPC be amended to state that the role of the TPC is to promote a competitive and fair market environment in Australia and to include a non-exhaustive list of the functions of the TPC.
ALRC 3.18 ...[The Commission] recommends that s 28 of the TPA be amended to make it clear that the TPC may exercise the functions listed in that section in respect of all provisions of the TPA.
ALRC 4.3　...[The Commission] recommends that s.　7 of the TPA be amended to provide that knowledge of, or experience in, consumer protection and fair trading may quality a person for appointment as a member of the TPC.
　　The Commission has a further important role to determine applications to exempt on public benefit grounds business arrangements from some of the restrictive trade practices provisions of the Act. This is accomplished through the authorisation and notification processes which the Act establishes.

TRADE PRACTICES TRIBUNAL　　The Tribunal consists of a President,who must be a Federal Court judge,and members who are appointed because of their knowledge of or experience in industry,commerce,economics,law or public administration.
　　The Tribunal deals with applications for review of decisions made by the Commission on authorisations and notifications. It may also make declarations relating to offshore mergers.

JURISDICTION Private actions　　The Federal Court hears private actions brought by individuals or corporations relating to restrictive trade practices(Part IV).
　　Both the Federal Court and State and Territory Courts hear private actions dealing with:
･ unfair trading practices(Part V and IVA,Division 1);
･ safety and information standards,bans and recalls(Part V,Division 1A)
･ actions against manufacturers/importers(Part V,Division 2A);and
･ prouduct liability(Part VA).
　　Remedies available in private actions are:
･ damages;
･ injunction(but not for mergers);
･ divestiture(mergers only);and
･ other orders.
　　In State and Territory lower Courts these remedies are available subject to any limitations on the remedies a Court may grant under State or Territory law.
　　Cases concerning implied conditions and warranties in contracts(Part V,Divisions 2 and 2A) are heard by the State or Territory Court which has the jurisdiction to deal with disputes under the relevant contract. The Federal Court may deal with these matters only if they are closely linked to other matters in which the Federal Court has jurisdiction,for example,unfair trading practices.
Transfer of cases between Courts Sections 86A and 86B of the Act, and the Jurisdiction of Courts (Cross Vesting Act) 1987 (and mirror laws in each State and Territory), allow ready transfer of private actions (other than restrictive trade practices cases) between the Federral Court, State and Territory Supreme Courts and the Family Court.　A party to an action may apply to have a case transferred to the Court which is the most convenient and least costly forum and that Court may exercise whatever jurisdiction is required to deal with the matter.　This avoids unproductive and costly disputes concering which Court has jurisdiction and also disposes of competing proceedings in the same matter in different Courts.
The Federal Court retains principal jurisdiction to deal with restrictuve trade practices matters but these are occasionally raised in proceedings in a State or Territory Supreme Court.　In any such case a party may apply for transfer of these issues to the Federal Court.　If the Commonwealth Attorney-General considers it appropriate in a particular case, transfer must take place to the Federal Court.　In ss 45D and 45E cases, proceedings can be taken only in the Federal Court and there is no provision for transfer.
Private representative proceedings
　　Where several individuals have each suffered injury, loss or damage as a result of similar conduct in breach of the Act, amendments in 1992 to the Federal Court of Australia Act permit a person to take a representative or class action in the Court on behalf of a group of seven or more such persons.　Each identifiable member of the whole group must be notified of the proceeding and may choose to opt out of the action.　Those who do not opt out will receive such share of any compensation granted as the Court may award to them but will not be able to bring their own individual actions.
　　This procedure has the advantage of efficiently resolving a large number of individual claims in one action and granting compensation to individuals who may not have been able to bring their own action.　A defendant may also benefit by having to face only one action rather than several.
ALRC 5.21 　 [The Commission] recommends that the TPA be amended to give the TPCstanding to bring representative proceedings　｛ under these provisions ｝ on behalf of persons who suffer loss or damage from a contravention of the TPA regardless of whether the TPC has a claim in its own right.　The Commission also considers that there is merit in ensuring that [these proceedings] may be commenced by peak consumer or business organisations...
Actions brought by the Commission　　The Commission can bring civil proceedings in the Federal Court in restrictive trade practlces matters seeking:
・　monetary penalties;
・　injunctions (including for mergers);
・　divestiture of acquired assets (mergers only);and
・　various other orders.
ALRC 8.7　　 [The Commission] recommends that s.　80A of the TPA be amended to make corrective advertising orders available for contraventions of Pt IV ...　as well as for Pt V.
The Commission may seek fines through criminal prosecutions in the Federal Court for breaches of the unfair trading practices provisions other than misleading or deceptive conduct (s.52) and unconscionable conduct (ss 51AA and 51AB), for wihch only civil actions may be taken. The Commission may also bring representative actions (s.87(1B)), after instituting successful criminal or civil proceedings for breaches of the provisions of Parts IVA, V and VA of the Act, seeking compensation for persons identified as having suffered, or likely to suffer, loss or damage as a result of the breach and who would otherwise have had to bring action of their own.
ALRC 5.18　　[The Commission] recommends that s.　87(1B) be amended to
・　remove the restriction that a representative action may only be brought where the TPC has brought a prosecution under S.79 or proceedings for an injunction under s.80
・　allow a representative action to be brought for a contravention of any provision of the TPA in relation to which the TPC has an enforcement role.
　　The Commission may not bring representative actions for consumers in contract disputes involving implied conditions and warranties (Divisions 2 and 2A of Part V) or for anyone suffering loss or damage from a breach of Part IV.
The Federal Bureau of Consumer Affairs may prosecute in the Federal Court for breaches of the criminal provisions relating to safety and information standards, and bans and recalls and may seek injuctions and other orders.
ANTI-COMPETITIVE PRACTICES (PART IV)Prohibitions　　Part IV of the Act prohibits the following anti-competitive trade practices:
・　anti-competitive agreements and exclusionary provisions, including primary or secondary boycotts (s.45);
・　misuse of market power (s.46);
・　exclusive dealing (s.47);
・　resale price maintenance (ss 48, 96-100);
・　anti-competitive price discrimination (s.49);and
・　mergers which would have the effect or likely effect of substantially lessening competition in a substantial market (ss 50, 50A).
　　Some arrangements and conduct can be exempted from legal proceedings under the Act by the processes of authorisations or notitication (see section on Exemptions).
Anti-competitive agreementsss 4545E
　　Section 45 prohibits two types of agreements.　Firstly, agreements between businesses　 which involve, for example, market sharing or which restrict the supply of goods are prohibited if they have the purpose or effect of substantially lessening competition in a market in which the businesses operate.
Secondly, prohibited outright are:
　　Agreements that contain an exclusionary provision.　Sometimes referred to as a ‘primary boycott', these are agreements between corporations in competition with each other which exclude or limit dealings with a particular supplier or customer or a particular class of suppliers or customers (s.45(2)).
‘Exclusionary provision' is defined in s.4D.
　　Agreements that fix prices (s.45A).　This includes agreements which purport to 'recommend' prices but which in reality fix prices by agreement.　Genuine recommended price agreements of 50 or more participants, and some joint ventures and collective buying groups are excluded from this prohibition.
　　Secondary boycotts are prohibited by s.45D.　These involve action by two or more people for example, members of a union or trade association which hinders or prevents a third person from:
・　supplying goods or services to a business;
・　supplying goods or services from a business; or
・　engaging in interstate or overseas trade or commerce;
　　where the target business is not the employer of those imposing the boycott.
　　A boycott of this kind will be prohibited if it substantially lessens competition or if it has the purpose or the effect or likey effect of substantially damaging the target business.
　　It is a defence under s.45D(3) if the main purpose of the action concerns the hours of work, remuneration, or working conditions, or the termination of employment of those imposing the boycott or fellow employees.
　　Section 45E complements s.45D and prohibits a person from entering into an agreement with an organisation of employees that prevents or hinders the person from dealing with the business; which is the target of the agreement on the terms on which previous dealings had taken place. Disputes involving possible breaches of s.45D and s.45E may, in some instances, be referred to the Industrial Relations Commission. Misuse of market power　 s.46
　　A business that has a substantial degree of power in a market is prohibited from taking advantage of that power for the purpose of:
・　eliminating or substantially damaging a competitor;
・　preventing the entry of a person into any market; or
・　deterring or preventing a person from engaging in competitive conduct in any market (s.46(1)).
　　Sub-section 46(1A) makes it clear that references in s.46 to a competitor or person include references not only to a particular competitor or person but both to competitors or persons generally and to a particular class of competitors or persons.
　　Whether or not a business is regarded as having a substantial degree of market power depends on the circumstances in each case.　The Court will take into account the extent to which the activities of the business in its market are constrained by the conduct of its competitors or potential competitors, or by the behaviour of those to whom it supplies or those who supply it (s.46(3)).
　　Although there may be no direct evidence that the business used its market power for any proscribed purposes, the Court may infer the necessary purpose from its conduct, the conduct of other persons or businesses, or from other relevant circumstances (s.46(7)).　The purpose of a director, employee or agent of a corporation is deemed to be the purpose of the corporation (s.84).
　　While s.46 prohibits the misuse of substantial market power it does not prohibit the mere acquisition or possession of such power. Exclusive dealings.47
　　Section 47 prohibits anti-competitive exclusive dealing which has the purpose or effect of substantially lessening competition in a relevant market.　Broadly speaking, exclusive dealing involves one corporation which trades with another imposing restrictions on the other's freedom to choose with whom, or in what, it deals.
　　It is prohibited to supply goods or services on condition that the purchaser:
・　will not acquire, or will limit the acquisition of, goods or services from a competitor of the supplier (s.47(2)(d));
・　will not resupply, or will resupply only to a limited extent, goods to particular persons or a particular class of persons or in a particular place or places (s.47(2)(f)).
　　A supplier may not refuse to supply goods or services because the intending purchaser will not comply with these conditions (s.47(3)).　It is likewise prohibited for a purchaser to impose such conditions on a supplier of goods or services (s.47(4)).
　　One form of exclusive dealing prohibited outright is ‘third line forcing' which involves the supply of goods or services on condition that the purchaser acquire goods or services from a particular third party or a refusal to supply because the purchaser will not agree to that condition.　Property lease provisions to similar effect are also prohibited (ss 47(6), (7), (8)(c), 9(d)).
　　Exclusive dealing arrangements (other than third line forcing) may be protected from challenge through the notification process.　Protection for third line forcing is available only through authorisation (see section on Exemptions).
Resale price maintenance　ss 48, 96-100
　　Suppliers, manufacturers and wholesalers are prohibited from specifying a minimum price below which goods may not be resold or advertised for resale.　This type of conduct, known as resale price maintenance, involves a supplier:
・　agreeing with a reseller that the latter will not advertise or sell below a specified price (s.96(3)(c));
・　setting a minimum price at which resellers should advertise, display or offer their goods for sale (s.96(3)(a));
・　inducing resellers not to discount, for example by giving special deals to resellers who agree not to (s.96(3)(b));
・　taking or threatening to take action against a reseller to force the reseller to sell the goods at or above the minimum specified price, for example by refusing to continue supplying them (s.96(3)(d),(e)); ・　inducing a price that is taken by the reseller as a price below which the reseller should not resell (s.96(3)(f)).
　　A supplier may recommend a resale price for goods, provided that the document setting out the suggested price makes it clear that it is a recommended price only and that the supplier takes no action to influence the reseller not to sell below that price (s.97).　Suppliers may specify a maximum price for resellers without infringing the resale price maintenance prohibition.
　　Section 98(2) permits a supplier to withhold supplies of goods to a person who, within the preceding 12 months, sold goods obtained from the supplier at less than their cost in order to promote business or to attract persons likely to purchase other goods.　(Selling particular goods below acquisition cost for these purposes is known as ‘loss leader selling'.)
　　The exemption relating to loss leader selling does not apply to a genuine seasonal clearance sale of goods which were not acquired for the purpose of being sold at that particular sale, nor does it apply where the sale took place with the consent of the supplier (s.98(3)). Anti-competitive price discriminations.49
　　A corporation is prohibited from discriminating between purchasers of goods of like grade and quality in relation to:
・　the prices charged for the goods;
・　any discounts, allowances, rebates or credits given or allowed in relation to the supply of the goods;
・　the provision of services in respect of the goods; or
・　the making of payments for services provided in respect of the goods
　 　　if the discrimination is so large and happens so often that its effect is to substantially lessen competition either in the supplier's or the reseller's market (s.49(1)).
　　Suppliers will not be in breach of this section if their preferential pricing has a pro-competitive effect or if they can show that the difference in prices reasonably reflected the difference in costs, or likely costs, of manufacture, distribution, sale or delivery (s.49(2)(a)).　Preferential discounts to meet a competitor's price are similarly not prohibited (s.49(2)(b)).
　　Purchasers are prohibited from inducing a supplier to discriminate in this way or from benefiting from preferential pricing if they are aware that the effect or likely effect will be to substantially reduce competition (s.49(4)).　A purchaser who takes such action may also be at risk under s.46(misuse of market power).
　　Conduct or arrangements in breach of s.49 cannot be authorised. Mergers or acquisitionsss 50, 50A
　　Section 50 generally prohibits mergers or acquisitions which would have the effect or likely effect of substantially lessening competition in a substantial market for goods or services.
　　Section 50(1) prohibits a corporation from directly or indirectly acquiring shares in the capital of a body corporate or assets of a person if the acquisition would have the effect or likely effect of substantially lessening competition in such a market.
　　Section 50(2) prohibits a person from directly or indirectly acquiring shares in the capital of a corporation or assets of a corporation if the acquisition would have the effect or likely effect of substantially lessening competition in such a market.
　　The following (non-exhaustive) list of factors must be taken into account in the evaluation of the effect or likely effect of particular acquisitions (s.50(3)):
・　the actual and potential level of import competition in the market;
・　the height of barriers to entry to the market;
・　the level of concentration in the market;
・　the degree of countervailing power in the market;
・　the likelihood that the acquisition would result in the acquirer being able to significantly and sustainably increase prices or profit margins;
・　the extent to which substitutes are available in the market or are likely to be available in the market;
・　the likelihood that the acquisition would result in the removal from the market of a vigorous and effective competitor; and
・　the nature and extent of vertical integration in the market. 　　Parties to mergers at risk of breaching the Act may apply to the Commission for authorisation (see section on Authorisation).
Acquisitions that occur outside Australia　　Section 50A deals with certain acquisitions occurring outside Australia that would substantially lessen competition in a market within Australia.
　　Section 50A(1) applies where, among other things, an acquisition occurring outside Australia results in the acquiring person obtaining a controlling interest in a corporation or corporations in Australia.
　　If an acquisition is not covered by s.50 and is covered by s. 50A, the Commission, the Minister or any other person can apply for a declaration by the Trade Practices Tribunal that an acquisition producing a substantial lessening of competition has occurred and that it has no resulting public benefit which would justify it.　Such an application must be made within 12 months of the acquisition (s.50A(3)).
　　If a declaration to this effect is made, the relevant business has up to six months (which may be extended to a maximum of 12 months) in which to cease carrying on business in the relevant market (s.5 0A(6)).
　　In its consideration of matters under s.50A, the Tribunal is required to take account of the same criteria as apply to Commission determinations for authorisation under s.50.

AUTHORISATION AND NOTIFICATION　　Under the authorisation and notification provisions the Commission has power to grant immunity from legal proceedings for some arrangements or conduct that might otherwise breach the restrictive trade practices provisions of the Act.
　　Application for authourisation must be made by a party to the arrangement or a party engaging in the conduct in question. Authorisationss 8891Authorisation is available for:
・　anti-competitive agreements (s.45);
・　primary boycotts (s.45);
・　secondary boycotts (ss 45D and 45E);
・　anti-competitive exclusive dealing arrangements (s.47);
・　exclusive dealing involving third line forcing (s.47); and
・　mergers leading to a substantial lessening of competition in a market (ss 50 and 50A);
but not for:
・　misuse of market power (s.46);
・　resale price maintenance (s.48);
・　price discrimination (s.49); or
・　price agreements (s.45A); except for agreements involving
　　　　■　at least 50 parties, for genuinely recommended prices for goods;
　　　　■　services;
　　　　■　joint buying groups; or
　　　　■　joint ventures
　　The Commission's statutory function in considering an application for authorisation is to apply one of two tests, depending on the conduct in question.
・　For agreements that may substantially lessen competition, the applicant must satisfy the Commission that the agreement results in a benefit to the public that outweighs any anti-competitive effect.
・　For primary and secondary boycotts, third line forcing and mergers, the applicant must satisfy the Commission that the conduct results in a benefit to the public such that it should be allowed to occur.
　　Except for mergers, the Commission must publish a draft determination and provide the opportunity for a conference of interested parties, before making a final decision whether to grant authorisation.
　　The immunity conferred by authorisation operates only from the time the Commission grants final authorisation.
　　The Commission is required to keep a public register of all documents relating to an authorisation decision.　The only exception is commercially sensitive material for which confidentiality may be granted (s.89).
　　Review of an authorisation determination by the Commission may be sought by applying to the Trade Practices Tribunal (s.101).
　　The Tribunal is required to determine appeals from the Commission in merger authorisation cases within 60 days (s.102(1A)).　However, this time limit does not apply if the matter is especially complex or other special circumstances arise (s.102(1B)).
Mergersss 50, 50A　　Authorisation applications for mergers are covered by additional specific legislative requirements.
　　The Commission must make a decision on such applications within 30 days of receiving them (plus any time taken by the applicant to provide additional information sought by the Commission).
　　The Act provides for the Commission to extend the period to 45 days in complex matters.
　　Authorisation is deemed to be granted if the Commission does not make a decision within whichever time frame applies.
　　In deciding whether to grant the authorisation the Commission will consider all potential public benefits from the proposed merger.
It is specifically required by the Act to regard as a public benefit:
・　a significant increase in the real value of exports; or
・　significant import substitution.
　　It must also take into account all relevant matters that relate to the international competitiveness of Australian industry.
Notificationss 9393A　　Exclusive dealing conduct gains immediate and automatic immunity from legal proceedings under the Act when notification of it is given to the Commission.
　　That protection remains unless revoked by the Commission.　It cannot be revoked unless the Commission finds that:
・　the conduct substantially lessens competition within the meaning of s.47 of the Act; and
・　any public benefit flowing from the conduct is outweighed by the lessening of competition.
Notification is not available for exclusive dealing that involves third line forcing (s.47(6),(7),(8)(c),(9)(d)).
Notification procedures
　　Before revoking a notification, the Commission must give interested parties the opportunity to attend a conference.　Application for a review of a decision on notification is made to the Tribunal (s.101A).
　　The Commission is required to keep a public register of all documents relating to a notification decision.　The only exception is commercially sensitive material for which confidentiality may be granted (s.95).
　　For both authorisation and notification procedures the Commission is required to keep a public register of all related documents.　Copies of this information are available for inspection at Commission offices in each capital city.　However, commercially sensitive material for which confidetiality has been granted by the Commission is not avaiable for public inspection.
Fees　　Trade Practices Regulations, which make fees payable in respect of applications for authorisation, and notification, came into effect on 11 February 1993.　Fees are payable on lodgment, as follows.
・　Application for merger authorisations s.88(9) $15000
・　Authorisation applications other than under s.88(9) $7500
・　Additional related authorisation applications $1500
・　Notifications $2500
・　Additional related notifications　 $500
STATUTORY EXEMPTIONSs.51　　Statutory exemption from certain restrictive trade practices prohibitions is available under the Trade Practices Act for:
・　conduct that is specifically authorised or approved by Commonwealth or State Act, or a Territory law, or any Regulation under any such Act; or
・　conduct that arises from:
　　　■　industrial agreements relating to conditions of employment, etc;
　　　■　a provision of a contract for the sale of a business or shares in a corporation solely for the protection of the purchaser in respect of the goodwill of the business;
　　　■　compliance with Standards Association of Australia (Standards Australia) standard;
　　　■　partnership agreements between individuals;
　　　■　export agreements (if full particulars are notified to the Commission within fourteen days of being made);
　　　■　consumer boycotts;
　　　■　certain arrangements relating to patents, copyrights, trade marks or designs.
Possible exemptions under s.172(2)
・　Conduct of a kind exempted from the application of the Act by regulation, for example some primary product marketing agreements (s.172).
・　Where regulations under the Act so prescribe, a contract or proposed contract between the Government of Australia and the government of another country; or.
・　similarly prescribed conduct in the course of a business carried on by the Commonwealth or a prescribed Commonwealth authority.
Part IV penalties and remedies　　Various penalties and remedies are available in the Federal Court for breach of the provisions of Part IV of the Act.
These are:
・　Monetary penalties (with the exception of ss 45D and 45E) of up to $10 million for companies and $500,000 for individuals.　Monetary penalties of up to $250,000 apply for ss 45D and 45E (s.76).
・　Injunctions (s.80).
・　Damages (s.82).
・　Divestiture of shares or assets illegally acquired or a declaration that a share transaction is void in the case of a prohibited merger (s.81).
・　Ancillary orders of various kinds in favour of persons who have suffered loss or damage because of the conduct.　These include:
　　　■　specific performance;
　　　■　rescission and variation of contracts;
　　　■　damages; and
　　　■　provision of repairs and spare parts (s.87).
ALRC 7.21 　[The Commission] recommends that the TPA be amended to provide that a court shall assess damages under s.82 in a way that is reasonable and appropriate in the circumstances and shall not be constrained by the common law principles of the law of contracts and torts.
ALRC 8.7　　[The Commission] recommends that s.80A of the TPA be amended to make corrective adveritising orders avaliable for contraventions of Pt IV ...　as well as for Pt V.
ALRC 8.11 　[The Commission] recommends that s.80A of the TPA be amended to make it clear that reassessment or revision of a corporation's internal compliance controls may be required as a term of injunctive relief.
ALRC 10.35　[The Commission] recommends that the same range of sanctions that is avaiable against a corporation or individual convicted of an offence against the TPA be available as civil penalties for contraventions of Part IV of the TPA.
ALRC 10.35　[The Commission] recommends that [s.76 of the TPA be amended]...to require the court to have regard to the relevant factors currently listed ...　and
・　(if the contravener is a corporation) whether a revision of the contrabener's compliance controls is necessary and the extent to which defective internal controls have been revised in light of the lessons learned from the circumstances in which the contravention occurred
・　how much, if any, profit was made as a result of the contravention
・　whether the contravener continued the relevant conduct
notwithstanding a written request from the TPC to discontinue it.
　　The Minister or the Commission have the power to seek monetary penalties, injunctions or diverstiture.
　　Individuals and corporations may, through a private actions, seek:
・　injunction (except in the case of a merger prohibited by s.50);
・　damages or one of the ancillary orders available under s.87; and ・　divestiture in relation to a merger (s.81(1)).
　　The Federal Court has the power to enforce undertakings concerning future conduct given by a person to the Commission following a Commission investigation (s.87B).
　　A defence based on Part IV may be raised in a Supreme Court proceeding, for example, to a term of a contract.
　　Any person or the Minister may seek a declaration from the court about the operation of the Act and in relation to conduct or proposed conduct.　The Commission and the Minister is entitled to intervene in any such proceedings.
UNCONSCIONABLE CONDUCT - PART IVA　　The Trade Practices Act prohibits unconscionable conduct in both commercial dealings (s.51AA) and in consumer transactions (s.51AB).
Commercial transactionss.51AA
　　Section 51AA provides that a corporation must not, in trade or commerce, engage in conduct that is unconscionable within the meaning of the unwritten law of the Australian States and Territories　that is, the general non-statutory or common law as it has evolved through decisions of the Courts.
‘Unconscionability' is accordingly not defined in the Act. Section 51AA does not apply to situations covered by s.51AB.
　　The term unconscionable conduct has come to refer to circumstances which have the following elements:
・　one party to a transaction suffered from a special disability or disadvantage, in dealing with the other party; and
・　the disability was sufficiently evident to the stronger partyl; and
・　the stronger party took unfair or unconscionable advantage of its superior position or bargaining power to obtain a beneficial bargain.
Consumer transactionss.51AB　　Section 51AB prohibits unconscionable conduct by corporations when they supply goods or services that are ordinarily acquired by consumers for their personal, domestic or household use but not for resupply or use in trade or commerce.
　　In such a transaction the stronger party may not take advantage of its position by behaving in an unfair or unreasonable manner.
Remedies　　Individuals and the Commission can bring civil actions in the Federal Court for unconscionable conduct seeking monetary compensation, rescission or variation of a contract, refund, or specific performance of a contract.　Damages under s. 82 are not available as a remedy for unconscionable conduct, but other equivalent orders can be made by the Court under s.87(2)(d)).　Actions under ss 51AA and 51AB can also be brought in State or Territory Courts of competent jurisdiction and the extent of remedies available depends on the particular Court's jurisdiction.
ALRC 7.28 　[The Commission] recommends that s.82 of the TPA be amended to allow recovery of damages under that section for a contravention of a provision of Pt IVA.
ALRC 7.28 　[The Commission] recommends that s.80A of the TPA be amended to make corrective advertising orders available for contraventions of ...　Pt IVA as well as for Pt V.
　　Although the Act does not define ‘unconscionable conduct', s.51AB does include a non-exhaustive list of factors which may be taken into account by the Court.　These are:
・　relative bargaining strengths of the parties;
・　whether the consumer understood any documentation used;
・　the existence of undue influence or pressure, or unfair tactics;
・　the imposition of conditions not reasonably necessary to protect the supplier's legitimate interests; and
・　how much the consumer would have had to pay, and under what circumstances, to buy equivalent goods or services from another supplier.
Examples of conduct which might be found unconscionable are:
・　high pressure sales techniques;
・　harassment;
・　use of standard form contracts which leave no room for negotiation; and
・　taking advantage of people who, due to limited command of English or for some other reason, did not understand the documents involved.

FAIR TRADINGPART VIntroduction
　　Part V of the Act contains a range of provisions aimed at protecting consumers and corporations that qualify as consumers.
　　The Commission has responsibility for unfair practices (Division 1). 　　The Federal Bureau of Consumer Affairs has responsibility for product safety and information standards and banning orders (Division 1A).
　　Protection is also afforded through:
・　conditions and warranties in consumer transactions (Division 2); and
・　actions against manufacturers and importers (Division 2A).
Unfair practicesss5265A　　Division 1 of Part V imposes strict liability ie intention does not have to be proved.
General prohibitionss.52
Misleading or deceptive conduct
　　Section 52 is a very broad provision.　It prohibits conduct by business which is misleading or deceptive, or which is likely to mislead or deceive.　Whether or not conduct is held to be misleading or deceptive will depend on the particular circumstances of each case.
　　Generally, sellers are required to tell the truth or refrain from giving an untruthful impression.　Failure to disclose material information may in some circumstances be a breach of the Act.　The duty to disclose can arise even where there is no particular relationship between the parties such as trustee and beneficiary or principal and agent.
　　Only civil proceedings can be brought for breach of s.52. Specific prohibitionsss 51A, 53-65A
Misleading representations about the future supply and use of goods and services
　　Section 51A prohibits the making of representations about the happening of any future event without reasonable grounds.　A business is deemed not to have had reasonable grounds for making a prediction unless it can produce evidence to the contrary.
False or misleading representations
　　Section 53 specifically prohibits false claims about:
・　the standard, quality, value, grade, composition, style, model or history of goods or services (s.53(a),s.53(aa));
・　whether goods are new (s.53(b));
・　the agreement of a particular person to acquire the goods (s.53(bb));
・　the sponsorship, approval, performance characteristics, accessories, uses or benefits of goods or services (s.53(c));
・　the sponsorship, approval or affiliation of a corporation (s.53(d));
・　the price of goods or services, for example that it is less than a competitor's price (s.53(e));
・　the availability or repair facilities or spare parts (s.53(ea));
・　the place of origin of goods (s.53(eb));
・　a buyer's need for goods or services (s.53(f)); and
・　the existence, exclusion or effect of any condition, warranty, guarantee, right or remedy (s.53(g)).
False representations in relation to land 　　Section 53A prohibits a business from making false or misleading representations or using misleading or offensive conduct in relation to the sale of land, for example about sponsorship or price.
Misleading conduct in relation to employment 　　Section 53B prohibits a business from engaging in conduct likely to mislead people seeking employment about the availability, nature, terms or conditions, or any other matter relating to the employment.
Not specifying the full cash price
　　Section 53C requires corporations to specify the full cash price when it advertises part of the price of goods or services, for example the deposit or the terms of repayment.
Falsely offering prizes
　　Section 54 prohibits corporations from offering gifts, prizes or other free items in connection with the supply of goods or services if it does not intend to provide them as offered.
Misleading the public as to the nature or characteristics of goods and services
Section 55 prohibits a person from engaging in conduct which is liable to mislead the public as to the nature, manufacturing process, the characteristics, the suitability for their purpose or the quantity of any goods.
　　Section 55A prohibits a corporation from engaging in conduct which is liable to mislead the public about the nature, the characterisitcs, the suitability for their purpose or the quantity of any services. Bait advertisind
　　Under s.56 goods or services must not be adverised at a specified (not necessarily a ‘special') price if the seller is or should reasonably have been aware that it would not be able to supply reasonable quantities at that price for a reasonable period.　What is ‘reasonable' will depend on the particular circumstances, including the market in which the goods are sold and the nature of the advertisement.
Referral selling
　　Section 57 prohibits the sales technique of inducing consumers to buy goods or services by offering them a rebate, commission or some other benefit in return for suggesting potential customers' or assisting in any way in selling the goods to other consumers if the inducement is contingent on an event occurring after the sale is made. Accepting payment without intending to supply
　　Section 58 prohibits a corporation from accepting payment for goods or services where it does not intend to supply them or intends to supply goods or services materially different from those paid for.
　　It may also be a breach if there are reasonable grounds, of which the corporation was (or should be) aware when accepting payment, that it would not be able to supply.
Making false or misleading statements about work-at-home schemes 　　Section 59 prohibits false or misleading representations about the profits and practicability of home-operated businesses, for example an activity that requires performance of work at or from home or a scheme that requires investment of money and associated work by the investor. Harassment or coercion
　　Section 60 prohibits the use of physical force, undue harassment or coercion by a corporation (or its servants or agents) in relation to the supply of goods or services to a consumer, or payment by a consumer for goods or services.
Pyramid selling
　　Section 61 prohibits the promotion of, or participation in, pyramid selling schemes in which a person makes a payment to a corporation with the prospect of receiving payments for the introduction of other participants to the scheme.
Sending unsolicited debit or credit cards
　　Section 63A makes it unlawful to send unsolicited debit or credit cards, or cards which can be used for both purposes, to any person. Unsolicited goods or services
　　Section 64 prohibits a corporation from demanding payment for unsolicited goods or services unless it has a reasonable basis for believing it has a right to payment.　The prohibition includes demanding payment for:
・　unsolicited advertising; and
・　unsolicited directory entries.
　　Section 65 prohibits that a person receiving unsolicited goods will not be liable for any loss or damage that occurs to the goods other than wilful or unlawful damage he or she causes.
　　If the recipient gives written notice that the goods were unsolicited and specifies where they are held, the supplier has one month to collect them.　After that the goods become the property of the recipient.　If no such notice is given, the supplier has three months from receipt of the unsolicited goods in which to recover the goods from the recipient before losing right of ownership (s.65(93)),(4),(5)).
ALRC 9.10 　[The Commission] recommends that criminal penalties be retained in Pt V, for both individuals and corporations, but that criminal liability should depend on proof of a particular advertent mental state. There should be no strict criminal liability under Pt V.
ALRC 9.11 　[The Commission] recommends that covil penalties should be made available in Divisions 1 and 1A of Pt V, in addition to the regime of criminal penalties.
ALRC 9.12 　[The Commission] recommends that it each element of the prohibited conduct is present, the contravener should be liable to a civil penalty, subject to the operation of statutory defences.　If each substantive element is engaged in knowingly, intentinally or recklessly, the conduct should constitute an offennce.
　　　NB Recommendation 9.18 contains varlous ‘machinery' provisions related to 9.11 and 9.12
ALRC 9.20 　[The Commission] recommends that the TPA provide that the TPC may initiate civil penalty proceedings against an accessory, even if the corporation is prosecuted in respect of the same conduct ...　[and vice versa].
ALRC 9.41 　[The Commission] recommends that, it civil penalties are introduced into Pt V, the time within which civil penalty proceedings under Pt V must be commenced should be three years.
ALRC 10.28　 [The Commission] recommends that whatever range of penalties is available against a corporation convicted of an offence against Pt A of the TPA should be made available as civil penalties under Pt V of the TPA.
DEFENCES AND EXEMPTIONS　　A defendant can be excused liability in a criminal prosecution (for fines) for contravention of Part V if it can be shown:
・　the contravention was due to a reasonable mistake;
・　the defendant relied on informantion supplied by another person (but not an employee or an agent of the business);
・　the reason for the alleged contravention was
　　　■　the action or failure of another person (but not a director, employee or agent of the defendant);
　　　■　an accident; or
　　　■　some other matter beyond the defendant's control; and
　　　■　the defendant took reasonable care and precautions to avoid the contravention (s.85).
State of mind　　In proceedings against a corporation, the state of mind of its directors, servants and agents can be attributed to the corporation.　A person's ‘state of mind' includes knowledge, intention, opinion, belief or purpose.　For the person's state of mind to be so attributed, the conduct in question must be within the scope of his or her actual or apparent authority (s.84).
News reporting　　A publisher of a newspaper or the owner of a radio or television station will not be liable for misleading or deceptive conduct, or misleading representations in the course of news reporting or otherwise providing information (s.65A).
　　The exemption does not apply to representations in an advertisement or which relate to the supply or promotion of goods or services by the media outlet.
Penalties and remedies　　The Act provides a range of penalties and remedies for breaches of the unfair practices provisions of Part V.
These are:
・　monetary penalties of up to $200,000 for companies and up to $40,000 for individuals (s.79);
・　injunctions to prevent the prohibited conduct continuing or being repeated (s.80);
・　damages (s.82);
・　corrective advertising (s.80A);
・　ancillary orders of various kinds in favour of persons who have suffered loss or damage because of the conduct, including:
　　　■　specific performance;
　　　■　rescission and variation of contracts;
　　　■　damages; and
　　　■　provision of repairs and spare parts (s.87).
ALRC 7.21 　[The Commission] recommends that the TPA be amended to provide that a court shall assess damages under s.82 in a way that is reasonable and appropriate in the circumstances and shall not be constrained by the common law principles of the law of contracts and torts.
ALRC 8.11 　[The Commission] recommends that s.80 of the TPA be amended to make it clear that reassessment or revision of a corporation's internal compliance controls may be required as a term of injunctive relief.
ALRC 10.21　[The Commission] recommends that s.80A be amended to provide that an adverse　publicity order may be imposed where a corporation is found to have contravened the Act and the court wishes to impose a pemalty.　｛ Similar orders to be available against individuals: ALRC 10.32. ｝
ALRC 10.43　[The Commission] recommends that the maximum civil penalty in Pt V be $200,000 for a body corporate and $40,000 for a person other than a body corporate and that the maximum fine in Pt V be $1 million for a body corporate and $200,000 for a person other than a body corporate.
ALRC 10.46　[The Commission] recommends that monetary penalties provided for in the TPA, both civil and criminal, be prescribed in terms of penalty units.　｛ Expressing penalties in terms of penalty units allows the legislature to increase the value of a single penalty unit in line with inflation. ｝
　　The particular Courts which may deal with private actions are referred to in the section ‘Jurisdiction'.
　　The Commission, the Minister or any other person can ask the Court for an injunction (s.80(1)).
　　The Commission, the Minister can apply for an order requining a person who has breache one of these provisions to publish corrective advertising or disclose information to the public (s.80A).
　　A private action for contravention of Parts IV, V (Divisions 1 and 1A only) and VA is generally subject to a time limit of three years from the time the cause of action arose.　For unconscinable conduct in contravention of Part IVA, action may be commenced at any time within two years of the day on which the cause of action arose.
ALRC 7.13 　[The Commission] recommends that s 82(2) of the TPA be amended to allow the court to extend the period in which a claim for damages can be commenced if the court considers it appropriate to do so.
ALRC 7.16 　[The Commission] recommends that s.87(1CA) of the TPA be amended to provide that the time limit for any application under s.87(1A) is three years and that the court has a discretion to extend that time if the court considers it appropriate to do so.
　　Section 83 provides that if in a proceeding it is proved that a person has contravened a provision of Part IV, IVA or V of the Act, a finding of fact made by a Court may be used as prima facie evidence in subsequent related proceedings by a person for compensation.
ALRC 12.23　[The Commission] recommends that s.83 of the TPA be amended to allow a finding of fact by a court or tribunal in any proceedings against a person under the TPA to be used as evidence of that fact in subsequent proceedings ...　except where the subsequent proceedings are for the imposition of a penalty.
Enforcement of undertakingss.87B　　Section 87B provides for enforcement in the Court of written undertakings accepted by the Commission in the exercise of its powers (other than in relation to Part X).
・　Where the Commission believes that a term of such an undertaking has been breached it may apply to the Court for:
・　an order directing compliance; and/or
・　an order to pay the Commonwealth up to the amount of any financial benefit that can be reasonably attributed, directly or indirectly, to the breach; and/or
　　　■　any order the Court considers appropriate to compensate a third party for loss or damage resulting from the breach; and/or
　　　■　any other order the Court considers appropriate.
ALRC 11.6 　[The Commission] recommends that the TPA be amended to
・　require the TPC to establish and maintain a register open to all members of the public
・　require that all undertakings entered into under s.87B be lodged on the public register within 28 days of being settled
・　allow terms of an undertaking that are confidential to be withheld from registration provided the register notes that a term has been withheld and the grounds .....
ALRC 11.9 　[The Commission] recommends that the TPA be amended to provide that
・　a court may require a person who is brought before the court for breaching a s.87B undertaking to lodge a security bond and
・　if that person is brought before the court for a subsequent breach of the undertaking, the court may order the forfeiture of all or part of the security bond.
ALRC 11.10　[The Commission] recommends that the TPA s.87B be amended to provide that, in deciding whether to accept an undertaking, the TPC must consider what steps the person offering the undertaking has taken to ensure that a relevant contravention will not occur again.
ALRC 11.11　[The Commission] recommends that the TPA s.87B be amended to provide that, in deciding whether to accept an undertaking, the TPC be required to consider, where relevant, what steps have been taken to ensure that the issue of compensation has been dealt with.
Declarations　　A person may seek a declaration from the Federal Court whether any proposed conduct would be in breach of any section of the Act other than Division 2, 2A or 3 of Part V (s.163A).
ALRC 11.27　[The Commission] recommends that the TPA be amended to provide that the TPC is able to seek a declaration from the Federal Court under s.163A.
PRODUCT SAFETY AND PRODUCT INFORMATIONDIVISION
1AIntroductionSections65B-65T in Division 1A of Part V are designed to ensure that:
■　certain goods meet particular standards; and
■　dangerous goods are not sold or can be quickly withdrawn from sale.
　　The Federal Bureau of Consumer Affairs is responsible for the
formulation of product safety and information provisions and the administration of these sections.
　　The Commission is responsible for conducting conferences to review proposed and emergency bans or proposed compulsory recalls of consumer products.
Compulsory consumer product standards　　Compulsory consumer product standards for a particular good may be made by regulation or declared by the Minister for Consumer Affairs by a notice in the Commonwealth Gazette (as 65D and 65E).　Corporations are prohibited from supplying goods:
・　that do not conform with a compulsory consumer product safety standard;
・　for which there is in force a notice declaring the goods to be unsafe; or
・　which are subject to a notice imposing a permanent ban (s.65C(1)).
There are two types of compulsory consumer product standard.
・　Safety standards require goods to comply with particular performance, composition, contents, methods of manufacture or processing, design, construction, finish or packaging rules, eg to display warning labels on the flammability of children's nightwear (s,65C(2)).
・　Information standards require prescribed information to be given to consumers when they purchase specified goods, eg labelling garments or household fabics to indicate the most suitable method of cleaning (s.65D).
　　A corporation may not export goods that do not comply with a compulsory product safety standard without the Minister's approval (s.65C(3)).
Unsafe goods and bans　　Goods that may cause injury to any person can be declared unsafe by the Minister for Consumer Affairs, by notice in the Commonwealth Gazette (s.65C(5)).
　　The supply of goods which have been declared unsafe is banned for 18 months following the declaration.　The banning order may then be renewed for a further 18 months, be allowed to expire unless revoked before the end of the period (s.65C(6)), or made permanent (s.65C(7)).
　　Before goods are declared unsafe or permanent ban is brought into effect, suppliers of the goods　 manufacturers, retailers, and others may request a conference with the Commission concerning the order (s.65J).
　　After the conference the Commission will make recommendations to the Minister which will be taken into account when the final form of the order is being decided (s.65K).　The whole process must be completed promptly.
Warning notices　　The Minister for Consumer Affairs can issue public warning notices stating that the safety aspects of particular goods are under investigation and/or warning of possible risks involved in using them (s.65B(1)).
　　Once any announced investigation is completed, and provided banning and/or compulsory recall action has not been taken, the Minister is required to publish a further notice advising of the outcome of the investigation.　Any proposed further action in respect of the goods may also be announced (s.65B(2)).
Voluntary product recalls　　A supplier who voluntarily decides to recall unsafe goods (ie not as a response to a compulsory product recall order), is required to notify the Minister for Consumer Affairs of details, in writing, within two days of taking the action (s.65R).
Compulsory product recalls　　The Minister for Consumer Affairs also has the power to order supplies to recall consumer goods that have safety-related defects (s.65F).
The power applies to consumer goods which:
・　do not comply with a compulsory product safety standard prescribed under the Act;
・　are banned goods; or
・　are goods which may cause injury to any person; and
・　where the supplier has not taken satisfactory action to prevent them causing injury, for example by recalling the goods.
In these circumstances the Minister can issue an order requiring the supplier to (s.65J):
・　take action to recall the goods within the period specified in the notice; and/or
・　disclose to the public the nature and circumstances of the defect and procedures for the disposal of the good; and/or
・　inform the public that the goods will be repaired or replaced or the price refunded, as the supplier thinks appropriate.
Emergency orders　　If it appears to the Minister that certain goods create an imminent risk of death, serious illness or severe injury, and emergency order can immediately be made implementing one of the following without a prior conference (s.65L):
・　a banning order; or
・　an order for product recall, disclosure of defect and disposals, repair, replacement or refund of price.
　　When an emergency banning order is made, a conference may be held after it comes into effect (s.65M).
　　No subsequent conferences are available if the emergency order is for product recall, repair or replacement.
Conferences on bans and recalls　　Before a compulsory recall order comes into effect (except for emergency recalls) all suppliers of the goods have the opportunity to request a conference with the Commission to discuss the order.　The request must be made within ten days, or longer if the Commission permits, and the conference must be held within 14 days.
　　As soon as practicable after the conference, the Commission is required to recommend to the Minister for Consumer Affairs whether the notice should be made final, whether any modifications should be made to the proposed order, or whether the notice should be withdrawn.
　　A record of proceedings at the conference, including documents and particulars of the recommendations, are placed on the Commission's public register (s.65K).　There is some provision for confidentiality to be granted if a company's secret formula or process is involved.
PENALTIES AND REMEDIES　　The same remedies apply for breaches of the safety provisions as for unfair business practices. These are:
・　monetary penalties of up to $200,000 for companies and $40,000 for individuals (s.79);
・　injunctions (s.80);
・　damages (s.82); and
・　corrective advertising (s.80A).
・　ancillary orders of various kinds in favour of persons who have suffered loss or damage because of the conduct, including;
　　　■　specific performance;
　　　■　rescission and variation of contracts;
　　　■　damages; and
　　　■　provision of repairs and spare parts (s.87).
ALRC 7.21 　[The Commission] recommends that the TPA be amended to provide that a court shall assess damages under s.82 in a way that is reasonable and appropriate in the circumstances and shall not be constrained by the common law principles of the law of contracts and torts.
ALRC 8.7　　[The Commission] recommends that s.80 of the TPA be amended to make it clear that reassessment or revision of a corporation's internal compliance controls may be required as a term of injunctive relief.
　　The Federal Bureau of Consumer Affairs can seek penalties or injunction if a supplier fails to comply with a compulsory recall order or if it is found to have supplied goods that:
・　do not comply with a compulsory standard; or
・　are the subject of a banning order.
　　Any person who has suffered loss or damage as a result of a failure to comply with a standard or banning order or with a compulsory recall order can seek, by way of a private action, damages, injunction or other Court order.
　　Depending on the amount of damages involved, individuals can seek remedies through a lower Court, eg State, Territory, or small claims tribunal, as a result of the Jurisdiction of Courts (Miscellaneous Amendments) Act 1987. (See section on Jurisdiction.)
CONDITIONS AND WARRANTIES IN CONSUMER TRANSACTIONS　PART V, DIVISIONS 2,2ARights against sellersDefinition of a consumer
　　Division 2 protects consumers when they acquire goods or services.　It implies various conditions and warranties into the transaction whether this is a contract for sale, exchange, lease, hire or hire purchase of goods or the supply of services.
A consumer, who can be either an individual or a business, is someone who acquires:
・　goods or services of a type normally bought for personal or household use, whatever they cost; or
・　any other type of goods or services costing $40,000 or less; or
・　a commercial road vehicle or trailer of any cost that is used mainly to transport goods on public roads
provided that the goods are not acquired solely for reselling, for using up or transforming to produce other goods commercially, or in repairing or treating other goods (s.4B).
The statutory warranties do not cover:
・　insurance contracts;
・　transport or storage of commercial goods; or
・　professional services provided by architects or engineers (s.74). The conditions
The Act implies the following conditions.
・　The supplier must be able to give the consumer clear title to the goods, including any bought at auction (s.69).
・　The goods must be of merchantable quality.　This means that they must meet a basic level of quality and perfomance that would be reasonable to expect of the particular goods, having regard to their price and the manner in which they are described (ss 71(1),66(2)).
・　The goods must be fit for their purpose.　This means they must be suitable for any particular purpose the consumer made known to the supplier when negotiating or arranging to purchase the goods, or a purpose which is obvious from the circumstances in which the sale took place (s.71(2)).
・　Goods that are supplied by description or sample must correspond with the description or sample (ss 70,72).
The warranties
The Act implies the following warranties in contracts.
・　The consumer is entitled to enjoy quiet possession of the goods (s.69).
・　The consumer is entitled to own the goods outright (s.69).
・　Services must be carried out with due care and skill (s.74(1)).
・　Services (except those provided professionally by architects and engineers) and any materials associated with them must be fit for the purpose for which they are supplied.　That is, they should achieve the result that the consumer made known to the supplier, unless the consumer did not rely or it was unreasonable to rely on the supplier's skill and judgment (s.74(2)).
Excluding conditions and warranties
　　A seller may not exclude, restrict or modify the statutory conditions and warranties.　Any term or a contract which attempts to do so will be void (s.68).
A corporation risks prosecution if it attempts to limit its liability in any way.　Any attempt to do so is in breach of s.53(g) which prohibits the making of false or misleading representations about a consumer's rights. Limited liability
If goods or services are not of a type normally bought for domestic, household or personal use, a supplier may sometimes be able to limit its liability to:
・　replacement of the goods or the supply of equivalent goods;
・　repair of the goods;
・　payment of the cost of replacing the goods or of acquiring equivalent goods;
・　payment of the cost of having the goods repaired; or
・　in the case of services:
・　re-performance of the services;
・　payment of the cost of having the services supplied again.
Liability of credit providers
　　A credit provider who regularly arranges finance for a supplier's customers, ie is ‘linked' to the supplier, may be liable jointly with the supplier to compensate a consumer in the event of misrepresentation, breach of contract, failure of consideration or breach of a condition or warranty by the supplier (s.73(1)).
　　A consumer who buys goods that breach any of the statutory conditions and warranties, using a credit provider who is independent of the seller, may claim only against the supplier (s.73(2)).
Remedies
　　The Commission cannot bring an action for breach of any of the statutory conditions or warranties.
　　A consumer may bring a private action for damages in any Court or Tribunal of competent jurisdiction against a supplier who, for example, supplies goods that are not of merchantable quality, or are not fit for the purpose.
Damages can include:
・　the cost of repair of goods (including any necessary freight costs); or
・　performing the services again.
　　In some circumstances, the Court may award compensation for any consequential loss or damage, for example if a defect in an appliance causes damage to a consumer's home.
　　For breach of a condition (not a warranty) a consumer has the right to return the goods to the seller and obtain a refund of the purchase price. To obtain a refund, a consumer should:
・　return the goods within a reasonable time;
・　not dispose of, lose, or destroy the goods;
・　not allow the goods to become unmerchantable through failing to take reasonable care to preserve them; and
・　not damage the goods by using them in an abnormal way (s.75A).
ALRC 6.9　　[The Commmission] recommends that s. 75A be amended to include a right to a replacement.　The choice between a refund and replacement ... should be made by the consumer.
Rights against manufacturers or importers
　　Division 2A provides rights against manufacturers or against importers if the manufacturer has no place of business in Australia.　These are similar to the rights provided in Division 2 against sellers.
　　The rights apply only to goods that are ordinarily acquired for personal, domestic or household use (s.74A(2)).
Liability
　　A consumeror a person who has acquired or derived title to the goods from a consumer (eg as a gift or buying second hand)may bring an action for damages against a manufacturer or importer if:
・　the goods are not reasonably fit for a purpose which was made known before the supply of the goods or for a purpose for which the goods are commonly supplied (s.74B);
・　the goods are not of merchantable quality (s.74D); or
・　the goods supplied by reference to a sample do not correspond with the sample (s.74E).
　　A manufacturer will not be liable to pay damages if the goods do not comply with the condition or warranty because of some fault that occurred after the goods left its control.
　　A manufacturer or importer supplying goods direct or through sellers will be liable to pay damages to a consumer (or a person who has acquired or derived title from a consumer)　if:
・　it fails to ensure that there is a reasonable supply of parts and repair facilities (unless the consumer is told when goods are bought that repair facilities or parts would not be available, or that there is a time limit on their availability) (s.74F);
・　the goods do not comply with its own express warranty or conditions these include written warranties, other claims made about the goods in promotional and technical material or by the manufacturer's staff or agents, and promises about the provision of services or availability of supplies (s.74G).
　　A manufacturer may be liable to indemnify a seller who has had to compensate a consumer for a breach of one of the conditions or warranties in Divison 2(s.74H).　This liability applies to:
・　goods ordinarily acquired for personal, domestic or household use; and
・　other goods costing $40000 or less.
Limited liability
　　A manufacturer's liability for goods which are not of a personal, domestic or household nature is limited to:
the cost of replacing the goods;
having the goods repaired; or
obtaining equivalent goods (s.74L).
Excluding conditions and warranties
　　A manufacturer may not exclude, restrict or modify a consumer's rights or remedies under Division 2A (s.74K) except in the limited circumstances covered by s.74L.　Any term of a contract, such as a manufacturer's guarantee, which attempts todo this will be void.
　　A corporation may not, without risk of prosecution, limit its liability.　Any attempt to do so is in breach of s.53(g), which prohibits making false or misleading representations about a consumer's rights. Remedies
　　Consumers may bring an action for damages against manufacturers and importers for breach of any of ss 74B-74G. Damages can be:
・　the cost of repair of goods (including any necessary freight costs); or
・　performing the services again.
　　In some circumstances, the Court may award compensation for any consequential loss or damage, for example if a defect in an appliance causes damage to a consumer's home.
Time limits
　　Actions must be brought within three years of the date the consumer became aware of the fault or damage occurring, and in any event, within ten years of the date on which the goods were first supplied (s.74J).
LIABILITY OF MANUFACTURERS AND IMPORTERS FOR DEFECTIVE
GOODSPART VA　　Part VA of the Act came into force on 9 July 1992.　It does not alter any of the rights and obligations arising under the law which existed before its enactment.　However, it does give individuals additional rights and imposes new obligations on manufacturers.
　　A person who is injured, or whose property is damaged, by a defective product will have a right to compensation against the manufacturer of the product.
Goods are defective if their safety is not what persons are entitled to expect in all the relevant circumstances (s.75AC).
Rights and obligations　　A claimant does not have to prove negligence, but does have to prove that on the balance of probabilities the product supplied by the manufacturer or importer was defective and that the defect was the cause of a loss.
The provisions of Part VA cannot be restricted, excluded or modified by contract (s.75AP).
　　The manufacturer is primarily liable for damages caused by defective goods.　However, the term ‘manufacturer' has an extended meaning including (s.75AB):
・　the corporation that actually made the goods;
・　a corporation that holds itself out to be the manufacturer;
・　a corporation that sells ‘home brand' goods manufactured for it under licence;
・　a corporation that permits someone to promote the goods as the corporation's;
・　a corporation that imports the goods; or
・　a corporation that produced or manufactured raw material or component parts.
　　Where the manufacturer is unknown to the claimant, a retailer or other supplier of the goods may be considered by Part VA to be the manufacturer.　In such circumstances the potential claimant is required to send a written request to the supplier(s) of the allegedly defective goods requesting the manufacturer's identity or the name of the person who provided the goods to that supplier (s.75AJ).
　　‘Supplier' could mean the retailer, wholesaler or any other intermediate supplier known to the claimant.　A written notice may be served on any or all of these.　After 30 days, if the potential claimant cannot identify the manufacturer, action may be taken against any supplier who did not respond to the request as though it were the manufacturer.
　　The rights and obligations previously conferred by the Act remain undisturbed.　This means that manufacturers and importers may become liable for damages caused by goods in one of two ways:
・　where the goods are not of merchantable quality, through the operation of Part V, Division 2A; and
・　where the safety of the goods is not what persons are entitled to expect and the manufacturer cannot be identified, through the operation of Part VA.
Business and employment relationships　　Part VA is not intended to create rights of a commercial nature.　A loss arising out of a business relationship between the injured person and the potential claimant is specifically excluded from its operation (s.75AE).
　　Simiarly, loss caused by work-related injuries is excluded as existing workers' compensation systems provide for this.　Losses regulated by international agreement are also excluded (s.75AI).
Manufacturers' defences　　Manufacturers may not be liable for defects which occurred later in the distribution chain or as a result of unforseeable misuse by the injured party or other users.　If, however, an injury resulted from a defect such as unsafe product packaging or packaging with inadequate warnings they could be found liable. 　　A manufacturer will not be liable to compensate a claimant for defective goods if it can prove one of the following defences:
・　the defect did not exist when the product left its control;
・　the only reason the product was defective was because it complied with a mandatory standard;
・　detection of the defect would not have been possible when the manufacturer supplied the product given the state of scientific or technical knowledge at the time (known as ‘development risks' or ‘state of the art' defence); or
・　in the case of a manufacturer of component parts, the defect was the fault (eg careless assembly, use of an unsuitable component, or incorrect or inadequate instructions) of the ultimate manufacturer, not the component manufacturer (s.75AK).
Mandatory standard　　Where a manufacturer successfully argues a defence of compliance with a Commonwealth mandatory standard, the Commonwealth and not the manufacturer is liable to compensate the claimant.　The manufacturer must, however, as soon as possible after raising the defence serve notice on the Commonwealth (s.75AL).
Liability of manufacturers　　Manufacturers of defective goods are liable both individually and collectively to a claimant for the same loss.　A claimant may sue the party which will best be able to pay compensation and is not required to take separate action against each party that is liable to make compensation (s.75AM).
　　Contributory acts or omissions to reduce compensation
　　In cases where loss is due to both a defect in a product and a culpable act or omission of a person who uses the product, the manufacturer's liability will be reduced by the Court by an amount which it thinks represents the person's contribution to the loss (s.75AM).
Time limits　　A claimant must begin an action within three years of the time of becoming aware of (or ought to have become aware of) the loss, the defect and the identity of the manufacturer of the defective goods (s.75AO(1)).
　　Actions to recover damages must be begun within ten years of the time the allegedly defective product (ie the one that caused the loss, not merely one of that type) was first supplied by the manufacturer (s.75AO(2)).　This is known as the ‘repose period', and it begins to run from the time when the alleged defective good was first supplied by the manufacturer.
Representative actions　　The Commission may sue a manufacturer for defective goods on behalf of one or more persons who have suffered loss, providing those persons give written consent for the Commission to act on their behalf (s.75AQ).
Other remedies　　Part VA does not limit, exclude or otherwise affect a claimant's pre-existing right under Commonwealth, State or Territory law for claiming remedies for losses.　In other words, it does not prohibit a person from taking action under tort, contracts or statutory law for losses resulting from defective goods (s.75AR).
APPENDIXFURTHER RECOMMENDATIONS OF THE AUSTRALIAN LAW REFORM COMMISSION
1.　Responding to contraventions
The TPA should be amended to:
　include a preamble or other provision stating: The objective of this Act is to provide a competitive and fair market environment in Australia (4.2).
　make it clear that where the court has found a contravention of the Act it may make orders for one or more of the following purposes:
　・　to compensate a person who has suffered loss or damage as a result of the contravention
　・　to undo the effects of the contravention
　・　to prevent a further contravention of the Act, both immediately and in the longer term, and to promote and encourage long-term compliance with the TPA
　・　to provide deterrence and, as a secondary or incidental outcome, retribution.　(4.8)
　　The TPC should expand its education and information role by preparing and making publicly available a document describing various orders that could be sought in different specified and illustrated situations (4.17) The TPC should be amended to:
　provide that, where the TPC considers it appropriate to do so, the TPC may, with the leave of the court and subject to any conditions imposed by the court, intervene in proceedings brought under the TPA (4.21)
　require the TPC, when commencing proceedings relating to a contravention of the TPA, to consider all orders that would be necessary to serve the purposes that are relevant in the circumstances (4.22)
　make it clear that administrative action undertaken by the TPC should be taken to achieve one or more of the following purposes;
　・　to compensate those who have suffered loss or damage as a result of the contravention
　・　to undo the effects of the contravention, buth immediately and in the loger term, and to promote and encourage community-wide compliance with the TPA
　・　to prevent future contraventions of the Act (4.23)
2.　Compensating persons who suffer loss or damage
The TPA sholud be amended
　to provide:
　・　where a court considers it appropriate to make an order for compensation and to impose a fine or make any other order for the payment of a pecuniary sum and it appears to the court that the defendant has insufficient means to pay both, notwithstanding anything in s.16 of the Crimes Act 1914 the court must give preference to compensation
　・　before imposing a fine or making any other order for the payment of a pecuniary sum, the court may adjourn consideration of the matter to enable enquiries to be made to ascertain the identity of any victim of the contravention and the extent of the victim's loss or damage
　・　the court may give directions as to the manner in which, and by whom, the enquiries should be made (7.4)
　to proide expressly that courts may make orders for contribution and indeminity and that contribution and indemnity may be claimed in the proceedings in which the plaintiff claims damages from the defendant (7.28)
3.　Undoing the effects of, and preventing further, contraventions
　　The TPA should be amended to require the court to take into consideration the estimated profits of a contravention when imposing a penalty, civil or criminal (8.4).　　Section 230 of the Corporations Law should be amended to enable the Federal Court, on application by the TPC, to prohibit a person who has been found, in a prosecution or civil penalty proceeding, to have contravened the TPA from managing a corporation for such period as is specified in the order (8.14)
4.　Penalty regime for Part V
　　Section 84 should, inso far as it attributes liability to a corporation, be amended to reflect the Criminal Law Officers Committee (CLOC) principles (9.35)
　　Section 84(3) of the TPA should be amended to reflect the general principle that criminal responsibility requires intention or advertence (9.37)
5.　Penalties for contravening the TPA
The TPA should be amended to provide
　expressly for corporate probation and probationary conditions of the following types:
　・　the corporation is to develop and submit to the court a program to prevent and detect contraventions of the TPA, including a schedule for implementation
　・　upon approval by the court of a program to prevent and detect contraventions of the TPA, the corporation is to notify its employees and shareholders that it has contravened the TPA and advise them of the steps it has taken to avoid recetition
　・　the corporation is to make periodic reports to the court or the independent representative appointed by the court regarding the corporation's progress in implementing a compliance programthe corporation is to s submit to a reasonable number of regular and unanounced examinations of its books and records at appropriate business premises by the independent representative and to inquiries made of knowledgeable individuals within the corporation (10.9)
　expressly for corporate community service orders (10.17)
　that the court may require a corporation that has contravened the Act to provide to the court, prior to the court assessing the need for or the amount or nature of a penalty, a report detailing what steps have been taken by the corporation since the contravention to improve the corporation's internal controls and to discipline the persons implicated in the contravention
　　The range of civil penalties avaiable against individuals who have contravened Pt V should include probation, community service orders and adverse publicity orders.　(10.33)
　　Section 241 of the Corporations Law should be amended to prohibit corporations from indemnifying their officers, employees or agents or any other person implicated in a contravention agains criminal or civil penalties imposed upon the officers, employees or agents or other person (10.34)
6.　Administrative powers
The TPA should be amended to
　require the TPC to include in its annual report information on the use of its formal administrative powers and a general summary of the types of complaints it receives and how it deals with them (11.16)
　give the TPC power to give to a private litigant information the TPC has obtained from an investigation involving its powers under s.155 if it is satisfied that the person is carrying on, or contemplating in good faith, a proceeding in respect of a contravention of the TPA to which the information is relevant (11.23)
　provide that the court may order a person who is found to have contravened the TPA to pay the reasonable investigation costs of the TPC, as determined by the court (11.24)
・　enable the TPC to require a person who makes a statement promoting, or apparently intending to promote, the supply of goods or services to provide the TPC, within the period specified in the notice, with proof of any claim or representation made in the statment
・　provide that it is an offence if the person served with the notice fails to respond to the notice within the specified time
・　enable the TPC, if it considers that the evidence provided by the person served with the notice is insufficient to support the claim or representation, to issue a notice under s.155(1) to that person or to authorise entry of that person's premises under s.155(2), notwithstanding that the TPC may not have a reasonable belief that the claim or representation is false or misleading
・　provide that a person may not refuse to answer a'substantiation' notice on the grounds that it may incriminate him or her
・　provide that the use of the into information obtained by the TPC as a result of issuing a notice is subject to limitations the same as those imposed by s.155(7)　　(11.31)
7.　Issues related to court procedures
　　The TPA should be amended to enable the TPC to seek discovery, inspection and interrogatories in proceedings seeking the imposition of a civil penalty against a corporation.　(12.28)

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