Australian Consumer Law Case Study 2022

Running head: AUSTRALIAN CONSUMER LAW
AUSTRALIAN CONSUMER LAW
Name of the Student:
Name of the University:
Author Note:

AUSTRALIAN CONSUMER LAW1
Part one:
Letter of Advice to Martha and Christina:
Firm address
Date: 10. 08.2019
Reference No. 123
Martha, Christina
Australia.
Dear Christina and Martha,
Re: Legal options available for seeking remedies against company Veganics as per Australian
Consumer Law.
We are pleased that you have given me an opportunity to advice you regarding the legal
options available to you to seek remedies from the Veganics ompany. In this regard, your case
will be dealt as per the provisions enumerated in the Australian Consumer Law given in
Competition and Consumer Act 2010 - Schedule 2.
Section 42 of the said Act1 provides liability of the receiver of an unsolicited service. It
states that when a person supplies any unsolicited service to another person, then such other
person is not liable for making payment for such service as well as is not liable for any loss or
damage incurred due to such supply.
1 Competition and Consumer Act 2010(Cth) s 42.

AUSTRALIAN CONSUMER LAW2
Section 202 of the Act provides that no one shall engage in any conduct which is
unconscionable. In equity, unconscionable conduct provides principles that states that
transactions in which unconscientious advantage is taken by one party must be set aside. It was
observed in Australian Competition and Consumer Commission v CG Berbatis Holdings Pty
Ltd3 by Gummow and Hayne JJ. As per section 21, a person shall not, in commerce or trade
related to services, engage in conduct or act which is unconscionable in all situations. This action
however does not apply to any conduct related to legal proceedings or claim for arbitration
related to supply. However, the term ‘unconscionable conduct’ has not defined anywhere in the
Act.
In the case of ACCC v Simply No-Knead (Franchising) Pty Ltd4, unconscionable
conduct was considered. In this case, SNK, the owner of a business in the name of ‘imply No-
Knead’ provided materials for making of bread in home kitchen. In this case, it was decided due
to the disputes between the franchisees and franchisor, the refusal made by the franchisor for
delivering the products to each of the franchisees results into unconscionable conduct made by
the owner SNK.
In another case of ACCC v Keshaw5, Keshaw sold educational materials belonging to his
children to the indigenous communities’ residents in the Northern territory. In many instances,
the materials provided by Keshaw were not found to be useful because of the age of the
consumer’s child. Justice Mansfield in this found that Keshaw used the advantage of the
commercial as well as educational inexperience of the people of the indigenous community.
Hence, his conduct appeared to be unconscionable.
2 Competition and Consumer Act 2010(Cth) s 20.
3 (2003) 214 CLR 51(Berbatis), 77.
4 (2000) 140 FCR 253.
5 [2005] FCA 558.

AUSTRALIAN CONSUMER LAW3
In order to prove the presence of unconscionable conduct, three conditions must be
present. Those are as follows; that the weak party was lying in a place of either any disadvantage
or disability, that the other party called the stronger party had knowledge of such special
disability or disadvantage of the weaker party and that the party at better, stronger position has
taken the undue advantage of the disability or disadvantage of the weaker party.
In the case of Commercial Bank of Australia Ltd v Amadio6, both Mr and Mrs Amadio
signed as a security a guarantee for paying debts of his son’s company assuming that their
liability amounted to the extent of 50,000 $ for 6 months and that company was in proper
financial condition. They had a very little education as well as understanding of English
language. However, their liability came out to be 240000 $ as the guarantee was not time limited.
Both of them were able to set aside the guarantee on the ground that the act was unconscionable
as they were unknown about the company’s financial position and that the company was actually
insolvent. The conduct of the bank was found to be unconscionable as it have disclosed about the
actual financial position of their son’s company.
Similar type of observation was made in the case of ACCC v Lux Distributors Pty Ltd7,
where proceedings were instituted by ACCC alleging that the company Lux was involved in
unconscionable conducts as vacuum cleaners were sold to 3 aged women. Sales representative
of the company called up the women under the false promise of free maintenance check for the
vacuum cleaner. The actual reason behind it was selling of expensive vacuum cleaner to them.
Here the women were exposed to unfair sales practice. The representative even pressured them
to buy it. Here in this case the company was hel liable on the ground of unconscionable conduct.
6 (1983) 151 CLR 447.
7 [2013] FCAFC.