Cartel Provisions and Liability under Competition and Consumer Act
Verified
Added on  2023/06/11
|9
|2362
|62
AI Summary
This article discusses the legal implications of cartel provisions and liability under the Competition and Consumer Act. It covers the definition of cartel provisions, joint ventures, personal liability, and ways to avoid liability and penalties. The article also cites relevant case laws and references.
Contribute Materials
Your contribution can guide someone’s learning journey. Share your
documents today.
1 Question one The issue in question is if 'one-off' private sale of land by a person who does not commonly sells properties and is not a real estate agent, can be considered as a transaction that has taken place in context of 'trade or commerce' as needed under ACL. In context of misleading or deceptive conduct that has been described in section 18 of the ACL, it has been provided that in trade/commerce, an individual ought not to be caught up in conduct that is misleading/deceptive. This question recently came before the court in Williams v Pisano1. In this case, a property was traded for $3.35 million by Mr. and Mrs. Pisano and the buyers were Mr. Williams and his wife. Soon after, the buyer had moved into the property, problems started to emerge. Similarly, there was a major water penetration into the property after the rainy weather. Under these circumstances, the buyers decided to sue the seller for a breach of s18. ACL It has been provided by this section that a person should not,in trade or commerce, be involved in conduct that can be described as misleading or may mislead or deceive. It was accepted by the seller is that representations made regarding the quality and standard of renovation can be described as misleading or deceptive. However, it was argued by the seller that the conduct had not taken place in context of 'trade or commerce'. As a result, the buyer cannot be held entitled for the protection provided by s18, ACL.2It was not accepted by the court of first instances, the Supreme Court of NSW. This Court stated that the sellers were accountable under s18, ACL. An appeal was made by the sellers. The Court of Appeal approved the 1Williams v Pisano [2015] NSWCA 117 2Barrick v Qantas Flight Catering Ltd (2007) 163 IR 207
Secure Best Marks with AI Grader
Need help grading? Try our AI Grader for instant feedback on your assignments.
2 submissions made by the sellers. Therefore, this Court stated that the conduct of the sellers had not taken place in context of trade or commerce. As a result, the protection provided was if anything was not available to the buyers and the buyer cannot succeed under section 18. In this context, the court stated that under general conditions, a person selling his home, through private treaty or auction or if such person conducts personal negotiations or with the help of a real estate agent, and cannot be considered to have undertaken these activities in trade or commerce or in context of commerce.3Regardless of the fact that an estate agent has been used or, if the agent had advertised the house, by arranging advertisements and brochures, or if the agent had sold the property by auction or if merely by negotiations, generally the sale will be a sale by the seller of the dwelling and not a transaction that has taken place in context of business. Regarding the ACL, the requirement of 'trade or commerce' is fulfilled by the actions that have taken place in commercial setting as compared to private setting. For example, it can be the private sale that has taken place between the parties who are generally not in the business of selling that particular thing.4Other matters that need to be considered in this regard are the director of the parties involved, the motivation behind the transaction and the role of the relevant person in the transaction for the purpose of deciding this issue.5 The sale of residential property generally takes place between a private individual who had lived in the home for some time span and a personal purchaser, who also means to live in the house for some duration.6Under these circumstances, it cannot be stated that the buyer or the seller had 3Concrete Constructions (NSW) Pty Ltd v Nelson (1990) 169 CLR 594 4Tonto Home Loans Australia Pty Ltd v Tavares[2011] NSWCA 389 5Australian Competition and Consumer Commission v Lux Distributors Pty Ltd(2013) FCAFC 90 6Wilson, D., 2014, ‘Consumer Information’ in Kate Tokeley (ed),Consumer Law in New ZealandLexisNexis, 128
3 entered the sale in order to advance a commercial purpose or business. Therefore, such sales are generally not considered as the transactions that have taken place in 'trade or commerce'. On the other hand, the situation would be diverse if the property is being sold by a developer as a part of the development. In this case, the fact that the same is being made, while advancing the business of the developer makessuch sale A transaction that has occurred in ‘trade or commerce'. After going through the above mentioned the discussion, and also the relevant case law,. It can be stated that generally of 'one off' private sale by a person who is not a real estate agent and does not commonly sells properties, cannot be considered as having taken place in context of trade or commerce as required by the Australian consumer Law. The same can also be stated in case of private sale of a business, a good or a sale that has taken place on the Internet.
4 Question two 1. It is possible for businesses to work together instead of competing against each other. The purpose behind such agreements is to increase profits at the same time, make the consumers feel that the businesses are still in competition. In this way, businesses can be described in cartel is they have control over the market and drive out the companies that cannot compete. The result of the illusion of competition is that genuine innovation is stiffeled and inefficiently operating businesses cannot be identified. In this context, the Competition and Consumer Act, 2010 (CCA) has prohibited cartels under the civil law and also as a criminal offense. As a result, businesses are prohibited by the CCA from entering an agreement which carries a cartel provision. According to section 44ZZRA, CCA, a cartel provision can be described as relating to any of the conduct mentioned below. It includes price-fixing, allocating customers, suppliers or territories, output restrictions and bid rigging. In this regard, it is worth mentioning that it is not necessary that the agreement should be an agreement in writing. In such a case, merely a simple understanding is sufficient if it becomes clear that independent decisions are not made by businesses but on account of pre-decided tactics. Therefore in this case it can be concluded that Lennon Music and Wilsun Guitars had breached the cartel provisions of CCA. 2. According to s457, any contract, understanding the arrangement between the parties that have the effect of the purpose of significantly decreasing competition in the marketplace, even in such actions does not fulfill the strict definition of other anti-competitive behavior like the cartels, has 7Competition and Consumer Act, 2010
Paraphrase This Document
Need a fresh take? Get an instant paraphrase of this document with our AI Paraphraser
5 been prohibited. In this regard, the factors that need to be considered by the court in order to arrive at a decision include:- ï‚·If there is an agreement or concerted practice that is covered by the CCA; ï‚·What this market? ï‚·If the conduct significantly decreased competition in the market, ï‚·Other types of anticompetitive behavior ï‚·The relevant sections of CCA. Therefore, under the Act, contracts, agreements, understandings and arrangements have the similar meaning. Basically all of them include the progress of action plan between two or additional parties. That cannot be enforced by the law, but the parties have every intent of following it. In case of 'arrangement', the court stated in TPC v Nicholas8that when each party intentionally arouses an expectation in the others that such party is going to act in a particular way, it appears that the party incurs at least a moral obligation for doing so. Similarly regarding understanding, the court stated in Top Performance v Ira Berk,9that an understanding involves a meeting of two or additional minds. In order to make an arrangement or to reach an understanding, it is not required that anything should be presented in writing. In fact generally such agreements are not recorded in writing. Sometimes, it is not even express and a 'wink or a nod' is enough. Therefore, if needed, the courts can infer the necessary 'meeting of the minds' from the circumstantial evidence like the evidence of similar pricing structures, joint action or even the evidence related with the opportunities that are available to the parties for arriving at an understanding. In this context it is 8TPC v Nicholas Enterprises Pty Ltd (No 2) (1979) FLR 83 9Top Performance Motors Ltd v Ira Berk (Qld) Pty Ltd (1975) 24 FLR 286
6 significant to consider what was said in Chile and what was understood to be positioned by each party. Therefore in the present case, both companies have breached section 45 of the CCA. 3. In the present case, Murray and Lennon can be held personally liable for the breach of CCA. In this regard, the law provides that an individual can be held personally liable for the violation of CCA did the court is content that:- ï‚·The person was involved in conduct that amounts to a breach of CCA; ï‚·The person tried to involve in conduct amounting to the breach of CCA; ï‚·The person aided, abetted or passed to another person to violate the provisions of CCA; ï‚·The person induced or tried to induce another person, by using threats, promises or other methods for breaching the CCA; ï‚·The person was directly/indirectly and intentionally involved in a breach of CCA by someone else. ï‚·The person conspired with other persons for violating the provisions of CCA. In view of these provisions, it can be stated that the nature and level of involvement that should be present on part of an individual in the breach of CCA encompasses a wide range of conduct. It ranges from merely knowing all the facts amounting to the breach of CCA to being the person who involved in the breach of the CCA or has incited other persons to do so. Even trying to do so is sufficient for pricing the liability of such a person. In this regard, it is not a defense that the attempts made by the person in this regard, remained unsuccessful.
7 4. The way in which Wilsun Music and Lennon Music can avoid liability and penalty for their conduct under the CCA, 2010 is to claim the defense of a joint venture. In case of civil penalty proceedings, it has been provided by the CCA that sections 44ZZRJ and 44ZZRK are not applicable in case of the contract, even if it carries a cartel provision if:- The cartel condition has been included in the contract for the purpose of a joint venture; and Such joint venture has been formed for production or supply of goods or services; and In the case of this sub-para 4J(a)(i) is applicable to the joint venture, such joint venture has been performed jointly by the parties to the contract and similarly the joint venture is carried on by a body corporate that has been created by the parties to the contract with a view to enable the parties to carry on the activity that has been mentioned in paragraph (b) jointly through (i) joint control; or (ii) their ownership of shares in the capital of such body corporate. In this way, it can be claimed in defense against the allegation of the breach of cartel provisions of the CCA that the understanding or the arrangement cannot be described as a contract; and at the time of making the arrangement or when the parties arrived at the understanding, it was the intention of each party to such understanding or arrangement to be a contract and they
Secure Best Marks with AI Grader
Need help grading? Try our AI Grader for instant feedback on your assignments.
8 reasonably believed that such understanding our arrangement was in fact, a contract and at the same time the cartel provision is for the joint venture. This is the way, Lennon music and Wilsun Guitars can avoid their liability and penalty under the CCA.
9 References Wilson, D., 2014, ‘Consumer Information’ in Kate Tokeley (ed),Consumer Law in New Zealand LexisNexis, 128 Case Law Australian Competition and Consumer Commission v Lux Distributors Pty Ltd(2013) FCAFC 90 Barrick v Qantas Flight Catering Ltd (2007) 163 IR 207 Concrete Constructions (NSW) Pty Ltd v Nelson (1990) 169 CLR 594 Tonto Home Loans Australia Pty Ltd v Tavares[2011] NSWCA 389 Top Performance Motors Ltd v Ira Berk (Qld) Pty Ltd (1975) 24 FLR 286 TPC v Nicholas Enterprises Pty Ltd (No 2) (1979) FLR 83 Williams v Pisano [2015] NSWCA 117