Assignment on Consumer Protection Law: Unethical Conduct

Consumer Protection Law: Unethical Conduct
Long Problem One
Question 1:
Issue
The legal issue here is whether Ingrid/Wine Stores Australia Corp has engaged in
misleading or deceptive conduct contrary to s18 ACL.
Relevant law
In order to determine whether s18 ACL is applicable, all four requirements in s18 have
to be proved by the plaintiff.
• The first requirement is there must be a natural person or a corporation.
• The second requirement is the transaction must occur in trade or commerce.
Section 2(1) defines the words trade and commerce. The court held that for a
transaction to be considered as occur in trade or commerce, it must have a
commercial character and it does not include one-off private sales (cf O’Brien
v Somologonov).
• The third requirement refers to the definition of engage in conduct. The words
engaging in conduct is much broader than the concept of representation of
present or past fact at common law misrepresentation. It includes doing or
refusing to do an act. It can also cover inaction remaining silent can constitute
engaging in conduct.
• The final requirement is whether the conduct is misleading or deceptive or likely
to mislead of deceive. Mislead to lead a person into error or to create a false
impression. Deceive not only means to lead into error but also denotes
deliberate misconduct (McWilliams Wines v McDonald's system of Australia)
Application
• Based on the facts, firstly, is clearly a natural person/corporation. Australia Corp
Secondly, it is also clear that Ingrid/Wine Stores Australia Corp is involved in
trade or commerce because the transaction has commercial character and it is
not a one-off private sale (cf. O'Brien v Smologonov).
• In proving the third element, the facts of the problem clearly reflect that
engaging in conduct when Australia Corp was Valentine. Ingrid sends an email
to Valentine.
• Next, we need to analyse the facts of the problem to ascertain whether the
conduct of Australia Corp was misleading or deceptive or likely to mislead or
deceive (McWilliams Wines v McDonald's System of Australia). Based on the
facts, Australia Corp clearly intended to mislead and deceive Valentine by
making the email looks like that it has been sent to all the Wine Store
franchisees. The email states that a sponsorship deal has been created with
Chef Jones, a popular chef but in fact, Chef Jones had never officially endorsed
any sponsorship deal.
Conclusion
With reference to the above discussion, Ingrid/Wine Stores Australia Corp has breach

s18.
Question 2:
Issue
Has Valentine/Middleton WineStore engaged in misleading or deceptive conduct as
prohibited under section 18 of the ACL?
Relevant law
In order to determine whether s18 ACL is applicable, all four requirements in s18 have
to be proved by the plaintiff.
• The first requirement is there must be a natural person or a corporation.
• The second requirement is the transaction must occur in trade or commerce.
Section 2(1) defines the words trade and commerce. The court held that for a
transaction to be considered as occur in trade or commerce, it must have a
commercial character and it does not include one-off private sales (cf O’Brien
v Somologonov).
• The third requirement refers to the definition of engage in conduct. The words
engaging in conduct is much broader than the concept of representation of
present or past fact at common law misrepresentation. It includes doing or
refusing to do an act. It can also cover inaction remaining silent can constitute
engaging in conduct.
• The final requirement is whether the conduct is misleading or deceptive or likely
to mislead of deceive. Mislead to lead a person into error or to create a false
impression. Deceive not only means to lead into error but also denotes
deliberate misconduct (McWilliams Wines v McDonald's system of Australia)
• Misleading conduct under s 18 is a strict liability conduct, therefore, it is
unnecessary to show that the conduct occurred with deliberate or careless
intent (ACCC v TPG Internet Pty Ltd; ACCC v Coles Supermarkets).
Application
• Based on the facts, firstly, Valentine/Middleton Wine Store clearly a natural
person.
• Secondly, it is also clear that Valentine/Middleton Wine Store is involved in
trade or commerce because the transaction has commercial character and it is
not a one-off private sale (cf O'Brien v Somologonov).
• In proving the third element, the facts of the problem clearly reflect that
Valentine/Middleton Wine Store was engaging when Valentine erected a store
display, with a large picture of Chef Jones and a sign starting ‘Chef Jones’
favorite wine!’.
• Next, we need to analyse the facts of the problem to ascertain whether the
conduct of Valentine/Middleton Wine Store was misleading or deceptive or
likely to mislead or deceive (McWilliams Wines v McDonald's System of
Australia). Based on the facts, the words and/or the display are likely to cause
customers to falsely assume that some kind of approval or sponsorship that
does not in fact exist.
• It is irrelevant that Valentine/Middleton wine store did not realise the
sponsorship did not exist because misleading conduct under s 18 is a strict
liability conduct, therefore, it is unnecessary to show that the conduct occurred

with deliberate or careless intent (ACCC v TPG Internet Pty Ltd; ACCC v Coles
Supermarkets).
Conclusion:
With reference to the above discussion Valentine/Middleton Wine Store has breached
s 18.
Question 3:
Issue
The relevant issue is whether Ingrid/Wine Stores Australia Corp has acted
unconscionably.
Relevant law
In order to determine whether s20 or s21 is applicable, all four requirements in each
section have to be proved.
• The first requirement is there must be a natural person or a corporation.
• The second requirement is the transaction must occur in trade or commerce.
Section 2(1) defines the words trade and commerce. The court held that for a
transaction to be considered as occur in trade or commerce, it must have a
commercial character and it does not include one-off private sales (cf O’Brien
v Somologonov).
• Additionally, under s 21, the transaction must be in connection with supply or
acquisition of goods or services to a person. The person in s 21 is not a listed
public company.
• The third requirement refers to the definition of engage in in conduct. The words
engaging in conduct is much broader than the concept of representation of
present or past fact at common law misrepresentation. It includes doing or
refusing to do an act. It can also cover inaction remaining silent can constitute
engaging in conduct.
• The final requirement is the definition of unconscionable. Under s 20, the
elements for unconscionability would have to comply with case law
requirements as identified in the case of Commercial Bank of Australia v
Amadio.
• On the other hand, in order to determine whether the conduct is unconscionable
under s 21, the court takes into account 12 factors listed under s22.
Application
• Based on the facts, firstly, Ingrid/Wine stores Australia Corp is clearly a natural
person/corporation.
• Secondly, it is also clear that Ingrid/Wine stores Australia Corp is involved in
trade or commerce because the transaction has commercial character and it is
not a one-off private sale (cf. O'Brien v Smologonov).
• However, the transaction was not in connection with the supply or acquisition
of goods or services therefore, s 21 is irrelevant to Ingrid/Wine Stores Australia
Corp.
• In proving the third element, the facts of the problem clearly reflect that
Ingrid/Wine Stores Australia Corp was engaging in conduct when Ingrid sends
an email to Valentine.