Consumer Law and Unfair Practices

This assignment delves into a scenario involving Henry, who engages in misleading advertising practices at his studio, Conway Studio, by prominently displaying a BlauGunkt recording machine while intending to use a lesser Doinstretta machine. This bait-and-switch tactic violates Australian Consumer Law (ACL) sections 29 and 35. The analysis explores Iggy's potential legal claims against Henry under the ACL, including compensation for losses incurred due to Henry's deceptive practices.

Running head: LAW ASSIGNMENT
Law Assignment
Name of the Student
Name of the University
Author Note

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Table of Contents
Question 1........................................................................................................................................2
Issue.............................................................................................................................................2
Law..............................................................................................................................................2
Application..................................................................................................................................4
Conclusion...................................................................................................................................6
Question 2........................................................................................................................................6
Issue.............................................................................................................................................6
Law..............................................................................................................................................6
Application..................................................................................................................................8
Conclusion.................................................................................................................................10
Reference list.................................................................................................................................11

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Question 1
Issue
Are the 150 music fans liable to being claim under negligence against BizCorpz?
Is Chris liable to bring a claim against BizCorpz for negligence?
Law
Negligence is the most common tort which arises when a person causes harm to another
person owing to the carelessness of the person causing such harm1. After the reforms in civil
liability, the law related to negligence is governed by both the Common law and statutory
legislations. Under the Common Law, in order to establish a claim of negligence, the aggrieved
party is required to prove the following essential elements:
 the defendant owed a duty of care towards the plaintiff;
 the defendant committed a breach of such duty of care;
 the breach has resulted in damages suffered by the plaintiff;
 the harm caused to the plaintiff was reasonable foreseeable by the plaintiff;
Duty of care- the principle of duty of care was established in the case of Donoghue v Stevenson
[1932]2, where the ‘neighbor principle’ was introduced for the first time. The rule states that one
must love his neighbor and must take reasonable care to prevent acts or omissions that is
reasonably foreseeable to cause any injury to his neighbor3. The term ‘neighbor’ refers to any
person who is directly affected by the acts of the defendant.
Breach of duty of care- after it is established that the defendant owed a duty of care towards the
plaintiff. It is important to establish that the defendant has breached the duty of care. It cannot be
assumed that since a person owes a duty of care, he has committed a breach of such duty.
1Levy, Neil M., Michael M. Golden, and Leonard Sacks. Comparative Negligence, Assumption of the Risk, and
Related Defenses. Vol. 1. California Torts, 2016.
2 [1932] AC 562.
3 Spamann, Holger. "Monetary Liability for Breach of the Duty of Care?." Journal of Legal Analysis (2016):
law009.

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According to section 9 of the Civil Liability Act 2003 (Qld), a person is said to commit a breach
of duty if:
 the person could reasonably foresee the risk;
 the risks was not significant;
 any reasonable person would have taken precautions to avert the risks if he was in the
position of the defendant;
Similarly, under the Common Law, in order to claim that the defendant has violated his duty
of care, it is necessary to establish that the defendant had failed to avert the risks what any
reasonable person would have done in the same position under same circumstances4.
Causation- the plaintiff must prove that the breach has caused harm to the plaintiff and such
harm was reasonably foreseeable by the defendant but the defendant failed to aver such harm.
The causation is decided by applying the ‘but for’ test as was held in the Barnett v Chelsea &
Kensington Hospital [1969]5. It implies that the risk was reasonably foreseeable but for the
negligence of the defendant, the risk could not be avoided. According to section 11 of the Civil
Liability Act 2003 (Qld), the plaintiff is required to establish that the breach of duty was a
necessary condition of the harm that was caused to the plaintiff6.
Damages- the plaintiff must establish that the damage was a result of the breach of the duty of
care on part of the defendant and although the risk was foreseeable, the defendant failed to avert
the risk, which directly caused damages to the plaintiff as was observed in Wagon Bound no 1
[1961]7. The actual harm must have been caused by the defendant’s action or omission owing to
the reasonably foreseeable consequence of the breach of the defendant.
Defenses
However, even after the plaintiff succeeds in establishing the essential elements to bring a
claim against the defendant, the defendant might be able to minimize or avert the liability of
negligence. In order to reduce or exempt from the claims of negligence, the defendant must
prove the existence of one or more of the following defenses:
4 Velasco, Julian. "A Defense of the Corporate Law Duty of Care." (2014).
5 [1969] 1 QB 428.
6 Civil Liability Act 2003 (Qld) (section 11).
7 [1961] AC 388.

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 the plaintiff had knowledge and appreciation of the risk;
 the plaintiff had willingly agreed to the risk with his consent;
The defendant cannot state that the plaintiff had voluntarily assumed the risk if the injuries
sustained or damages suffered by the plaintiff was the consequence of the action or omission of
the defendant. The defendant must prove that the risk accepted by the plaintiff is not the result of
the action or omission of the defendant.
Application
As was observed in the case Donoghue v Stevenson, in order to establish that the
defendant owed a duty of care towards the plaintiff, the plaintiff must prove that the plaintiff and
the defendant are related to the extent that the defendant should have taken reasonable steps to
avert any act or omission. Further, the defendant could reasonably foresee that such act or
omission would cause harm to the plaintiff. On the facts here, BizCorpz organized a rock concert
in a concert performance tent. The concert was organized during the summers and the fans would
stand for three hours inside the tent to watch the performance.
Here, the BizCorpz hired a performance tent that would accommodate 200 people having
one front entrance and exit doorway and three other exits and entry doorways. However, to
prevent people from entering without a ticket they have closed the other three exit and entry
doorways leaving only one front entry and exit doorways. The BizCorpz owed a duty of care
towards the music fans and should have taken reasonable steps to ensure that no harm is caused
to them. The tent had no ventilation, no air-condition and it was getting hotter causing some fans
to collapse from the heat.
BizCorpz was aware of the fact that the concert was being held during the summer and
the tent had no air-condition neither any ventilation, hence, it is obvious that some fans might fall
sick due to the heat inside the tent. Moreover, since they allowed the fans to enter without any
ticket, it was again obvious more people will come to see their performance and consequently,
the tent got overcrowded as 400 people were allowed to enter into the concert. As held under
section 9 of the Civil Liability Act 2003 (Qld), a defendant is considered to have committed a
breach of his duty of care if he failed to avert the risk that was reasonably foreseeable and the

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risk was not significant8. Any reasonable person would have averted the risk if they were in the
position of the plaintiff under same circumstances9.
The risk involved in the given scenario was reasonably foreseeable because as it is the
concert was being held in summers and that too inside a tent that could accommodate only 200
people. Moreover, it lacked air-conditioning and ventilation; under such circumstances any
reasonable person would have arranged to install air-condition or ventilation to prevent the fans
from collapsing. Furthermore, despite the availability of three extra exits and entry doorways
they had only one front doorway and exits opened for the fans. While they announced 15-minute
break allowing the fans to go out and have fresh air, BrizCorpz should have opened the other
three exits doorways given that the tent was over crowded with 200 extra people. Any reasonable
person in the position of BizCorpz would have done the same to prevent the risk of sustaining
injuries while going out of the tent along with heat exhaustion, de-hydration, and fainting.
As explained in the Barnett v Chelsea’s case, applying the ‘but for test’ it can be argued
that the risk of sustaining injuries, fainting, heat exhaustion was reasonably foreseeable and
could have been avoided but for negligence on part of the BizCorpz, they failed to take
reasonable steps to avert such risk of harm caused to the 150 music fans. The injuries sustained
by the fans were a direct result of consequence of the breach committed by BizCorpz. As per
section 11 of the Civil Liability Act 2003 (Qld), the duty of care breached by BizCorpz formed
the necessary condition of harm that was caused to the music fans. The injured fans have
sustained such injuries while exiting out of the concert and such injuries is the result of the
failure to avert the risks that was reasonably foreseeable by any prudent person.
In regards to the music fan, Chris, the BizCorpz had asked the fans not to consume
alcohol or take any illegal drugs at the concert inside the tent. However, Chris had entered into
the concert with 12 bottles of beer and finished all the bottles during the first hour of the concert.
Consequently, when the break was announced, Chris fell over and sustained injuries from the
fans that were leaving the tent. Under such circumstances, BizCorpz may use the defense that
Chris was aware that the consumption of illegal drugs and alcohol was not permitted at the
concert inside the tent. Despite being aware of the fact that alcohol was not allowed at the
8 Zipursky, Benjamin C. "Reasonableness in and out of Negligence Law." (2015).
9 Civil Liability Act 2003 (Qld) (section 9).

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concert, he carried 12 bottles and got himself drunk. This can be considered as voluntary
assumption of risk where Chris voluntarily accepted the risk of consuming alcohol inside the tent
knowing that it was not permitted and that it may cause injuries to him.
BizCorpz may state that Chris willingly appreciated the risk and agreed to it without any
restraint. The strongest argument that BizCorpz may present is that the injuries sustained by
Chris did not result from the consequence of his breach of duty of care. Even if BizCorpz had not
committed a breach of duty of care, Chris would have sustained injuries, as he was drunk
because of which he tripped and fell over. Had Chris not entered into the concert with alcohol
and drank all the 12 bottles, he would not have tripped and fell over. The other fans collapsed
due to heat exhaustion unlike Chris who fell over as he was drunk and thereafter, was walked on
and sustained injuries.
Conclusion
The 150 injured fans are entitled to bring a negligence claim against the BizCorpz and in regards
to Chris; he is not entitled to bring any claim against BizCorpz.
Question 2
Issue
Is Iggy entitled to bring legal claims under the Australian Consumer Law against Henry?
Law
The Australian Consumer Law is applicable to all individuals and businesses along with
the consumers within the meaning of section 3 of the Act provided the relevant conduct is related
to commerce or trade10. The ACL safeguard the consumers by prohibiting unconscionable
conduct, misleading or deceptive conduct, unfair terms and other various specific kinds of
prohibited contract.
According to section 18 (1) of the Act, a person is prohibited from engaging into any
conduct that is misleading or deceptive or is likely to deceive or mislead11. The section is not
only restricted to consumers but is also applicable to any interested public as was observed in
10 Competition and Consumer Act 2010 ( Cth) Schedule 2 (section 3).
11 Competition and Consumer Act 2010 ( Cth) Schedule 2 (section 18 (1)).

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Eveready Australia Pty Ltd v Gillette Australia Pty Ltd [2000]12. There are three essential
requirements that must be fulfilled by the aggrieved party to establish that a person or business
has been engaged in a conduct that is deceptive or misleading.
 A person is said to have been ‘engaged in a conduct’ if such person makes a statement or
promise or claim or performs an action as was held in Henjo Investments Pty Ltd v
Collins Marrickville Pty Ltd (1989)13;
 The conduct referred to is related to some form of trade or commerce;
 The conduct was deceiving or misleading;
In order o determine whether a conduct was misleading and deceptive, the court shall apply
the objective test that was applied in the Taco v Taco Bell [1982]14. Further, the misleading or a
deceptive conduct extends to non-disclosure of any relevant information related to the concerned
goods or services.
The Australian Consumer law prohibits a person or businesses from engaging into unfair
practices under section 29 of the Competition and Consumer Act. According to section 29 of
the Act, the making of false representation is strictly prohibited as was observed in the ACCC v
Apple Pty Ltd [2012]15. The following practices may be categorized as false representations
amounting to unfair practices:
 Making false statements with respect to the goods regarding its standard, value, quality,
composition, model, style or any particular history or previous use of the goods;
 Making statement stating that the goods are new;
 Making false statements regarding the exclusion or existence or any warranty, guarantee
or effect of the goods;
The other form of unfair practices include bait advertising under section 35 of ACL which
implies that placing a product at a price that attracts the buyers when the person advertising
knows that he will not be able to supply those services or goods. Further, the ACL stipulates
certain statutory guarantees to the consumers that are implied and must be complied by the
12 [2000] ATPR 41-751.
13 (1989)FCA 354.
14 [1982] FCA 136.
15 [2012] FCA 646.

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person providing such services or products16. According to section 54 of the Act, the person
receiving the service is entitled to receive services or goods of acceptable quality and that
matches with the description made by the person providing such services or goods17.
According to section 57 of the Act, the goods or services provided must corresponds with
the any demonstration model or sample in quality, condition or state. With respect to the supply
of services to the consumer, the person providing such services shall render the same with due
care and skill18. According to section 61 of the Act, the services and any product resulting from
the services should be fit for the purpose for which the service or the goods obtained by the
person19.
In the event of a breach of any statutory provision, the aggrieved person may be entitled
to compensation and bring a civil action against the breaching party. The person breaching the
statutory provision may be subject to criminal penalty or severe financial liabilities.
Application
As discussed above that the Australian Consumer Law extends protection to all
individuals apart from the consumers within section 3 of the Act with respect to conduct related
to trade or commerce. On the facts here, Iggy wishes to record a song ‘Happy Birthday’ as a
birthday present for his daughter and contacts the Conway Recording studios owned by Harry
Conway. Henry states that the studio produces recordings that are of best quality. On inspection,
Iggy found a BlauGunkt sound recorder machine in the studio, which is famous in the music
industry for producing high-quality sound recordings. Iggy points at the machine and agrees to
record as it produces great music and he has worked with it before.
Here, it is implied that the Iggy had agreed to record his song with the BlauGunkt
recording machine as he has worked with it before and produces great music. He mentions it by
pointing at the machine and agrees to record the song at $7000. Later, he finds that Harry has
used the Donstretta Sound recorder machine because of which the sound quality was poor.
Donstretta is an Italian recording system that is known for producing poor quality machine. As
discussed above, section 18 of the ACL prohibits any person from making false statements about
16 Competition and Consumer Act 2010 ( Cth) Schedule 2 (section 35)
17 Competition and Consumer Act 2010 ( Cth) Schedule 2 (section 54).
18 Competition and Consumer Act 2010 ( Cth) Schedule 2 (section 57).
19 Competition and Consumer Act 2010 ( Cth) Schedule 2 (section 61).

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any product or services that misleads or deceives the persons purchasing such product or
services.
As explained in the Henjo’s case, Henry was engaged in a conduct where he misled or
deceived Iggy by making a false statement that his studio produces best quality sound
recordings. Henry had placed the BlauGunkt recording machine in the studio, which convinced
Iggy to record with in the studio using the machine, as it is famous for producing best quality
music in the music industry. Despite being aware, that Iggy had agreed to record his song using
the BlauGunkt machine, which he expressed by pointing at the machine, as he expected best
quality sound recording, Henry did not disclose that there was a Donstretta recording machine.
According to Taco’s case, non-disclosure of relevant information related to the service or goods
obtained by the purchaser also amounts to misleading or deceptive conduct under ACL20.
The ACL stipulates certain statutory guarantees to the consumers and the interested
persons who are engaged in any conduct related to trade or commerce. As per the guarantees,
Iggy was entitled to receive services that corresponds with the description or statement made by
Henry and that which serves his purpose which was to record a best quality song. This
establishes that Henry has failed to comply with the statutory guarantees stipulated under section
54 of the ACL.
Section 29 of the ACL prohibits a person or businesses to make any false statements or
engage in any form of unfair practices as was ruled in the Apple’s case21. In the given scenario,
Henry made false statements with respect to the goods regarding its quality of the sound
recordings made in the studio22. When Iggy asked Henry whether the sound recording quality ion
the Conway Recording studio was good, Henry stated that the studio produced best quality sound
recordings. According to section 57 of the ACL, every consumer or interested person who is
engaged in any form of trade or commerce, is entitled to the right to receive goods or services of
acceptable quality and expects to receive goods and services without any defect. Iggy wanted
best quality sound recording, which is an implied condition and Henry was under statutry
20 Howells, Geraint, and Stephen Weatherill. Consumer protection law. Routledge, 2017.
21 Competition and Consumer Act 2010 ( Cth) Schedule 2 (section 29).
22 Twigg-Flesner, Christian. Consumer product guarantees. Routledge, 2017.

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obligation to comply with the statutory guarantees stipulated by the Australian Consumer Law
with respect to the goods and services obtained in relation to trade or commerce23.
Henry had placed the BlauGunkt recording machine, which convinced Iggy that the
studio produces best quality recordings as he himself had used the machines, and it does
produces best quality recordings. However, Henry knew that he would be using the Doinstretta
recording machine that was placed right behind the BlauGrunkt machine. This establishes the
fact that Henry had been engaged in unfair practices such as bait advertising under section 35 of
the ACL, which amounts to an infringement under section 29 of the Australian Consumer
Law24.
Henry has been engaged in unfair practices by making false statements with respect to the
quality of recordings made by the Conway Studio, have committed a breach of the statury
provisions of the ACL, and is entitled to compensate Iggy for the loss resulting out of such
breach.
Conclusion
Iggy is entitled to bring legal claims against Henry under the Australian Consumer Law.
23 Latimer, Paul. "Protecting Consumers from Unfair Contract Terms: Australian Comparisons." (2016).
24 Competition and Consumer Act 2010 ( Cth) Schedule 2 (section 29).

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Reference list
ACCC v Apple Pty Ltd [2012] FCA 646
Barnett v Chelsea & Kensington Hospital [1969] 1 QB 428
Civil Liability Act 2003 (Qld) (section 11)
Civil Liability Act 2003 (Qld) (section 9)
Competition and Consumer Act 2010 ( Cth) Schedule 2 (section 18 (1))
Competition and Consumer Act 2010 ( Cth) Schedule 2 (section 29)
Competition and Consumer Act 2010 ( Cth) Schedule 2 (section 29)
Competition and Consumer Act 2010 ( Cth) Schedule 2 (section 3)
Competition and Consumer Act 2010 ( Cth) Schedule 2 (section 35)
Competition and Consumer Act 2010 ( Cth) Schedule 2 (section 54)
Competition and Consumer Act 2010 ( Cth) Schedule 2 (section 57)
Competition and Consumer Act 2010 ( Cth) Schedule 2 (section 61)
Donoghue v Stevenson [1932] AC 562
Eveready Australia Pty Ltd v Gillette Australia Pty Ltd [2000] ATPR 41-751
Henjo Investments Pty Ltd v Collins Marrickville Pty Ltd (1989)FCA 354
Howells, Geraint, and Stephen Weatherill. Consumer protection law. Routledge, 2017.
Latimer, Paul. "Protecting Consumers from Unfair Contract Terms: Australian Comparisons."
(2016).
Levy, Neil M., Michael M. Golden, and Leonard Sacks. Comparative Negligence, Assumption
of the Risk, and Related Defenses. Vol. 1. California Torts, 2016.
Spamann, Holger. "Monetary Liability for Breach of the Duty of Care?." Journal of Legal
Analysis (2016): law009.
Taco v Taco Bell Pty Ltd [1982] FCA 136
Twigg-Flesner, Christian. Consumer product guarantees. Routledge, 2017.

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Velasco, Julian. "A Defense of the Corporate Law Duty of Care." (2014).
Wagon Bound no 1 [1961] AC 388
Zipursky, Benjamin C. "Reasonableness in and out of Negligence Law." (2015).