Question:

“Johnny has decided to add a new range of pasta dishes to his menu. He has placed a large sign on the restaurant window promoting his new pasta dishes as the best pasta in town, made with all fresh ingredients!. Angel, the owner of Angels’ the Italian restaurant next door, is rather annoyed about the sign. She has been serving pasta for years. She has accused Johnny of misleading customers, because she knows that Johnny still used tinned olives (preserved in a can) in his pasta dishes. Johnny’s response is that even if the olives are from a tin, they are fresh from the tin. Angels has now threatened legal action under ACL s 18”.

1. Advice Angel how to bring a legal action against Johnny under ACL. You should provide relevant precedents and relevant sections from ACL (10 marks).
2. Explain if such an action likely to succeed? What sort of penalties Johnny may have to pay if he breached Consumer Law Guarantees (10 marks).
3. Power Point Presentation-(10 marks).

Answer:

Issue:

Whether Angel can bring legal action against Johnny under the ACL.

Law:

The Australian Consumer Law under Section 18(1) states that No person who is engaged in trade or commerce shall not conduct anything, which misleads, deceive, or is like to mislead or deceive (Corones, 2013). The section confirms to have a standard on the market place. Section 18 of the Australian Consumer Law states that, the not only the consumers but also the traders may take part to sue the other trader for misrepresentation. Misleading a consumer does not require an intention or particular state of mind. However, misleading conduct is prohibited and strict liability is imposed on the conduct (Corones, 2014). There may be certain circumstances where a trader may be liable for failure to speak; this may arise when a trader fails to qualify a statement. The impact or area covered within case laws. As per provisions, the ACL a business must not conduct or mislead about the nature, manufacturing process, characteristics, suitability, and quantity of goods and services.

To sue a trader for misleading conduct or misrepresentation any of the following instances must be recorded in which the trader has made false or misrepresentation about; the standard, quality, value of goods and services; about the composition of goods or services; performance of goods or services; price of goods and services. The person or the complainant must bring or institute a suit before the court within 6years from the date the cause of action took place as stated under Sub-Section (2) of Section 236 and Sub-Section (3) of Section 237( Jones,2015).

Application:

According to the given case law, Angel can bring legal action against Johnny by filing a suit before the Australian Competition and Consumer Commission. The fact of the case says that Johnny has advertised of making quality pasta. Angel who is also engaged in making pasta alleged Johnny of misleading consumers by cooking in tined olive oil, which is not of good quality, So Alice decided to file a suit against Johnny for misrepresenting its customers. Alice can file the case against Johnny under Section 18 of the Australian Consumer Law. Section 18 of the ACL covers a broad area and includes consumer as well as traders to file suit against the alleged person who is engaged in the misrepresentation.  In Bisset vs Wilkinson it has been held that the person giving the statement knows the true fact and so if he make any statement which is false or misrepresenting can be held liable. The same in the case of Smith V Land & House Property Corp ( Latimer,2016). From the above-referred cases, it can be said that Johnny has misrepresented the fact of using low quality olive oil whereas advertising it as good quality product. In Butcher vs Lachlan Realty Pty Ltd., it has been stated that to say that the alleged misrepresentation has been conducted, we shall confirm some of the following principles.  Such as, the alleged misleading has been conducted is the question of fact. For instance, a seller of a bicycle helmets uses stickers upon the helmets indicating that the helmets are met with the mandatory safety standards, however the helmet have not been laboratory tested. Section 52 has been contravened and the court must determine the question.( Rahman, Amin & Ahamat,2014). To this principles are added some principles which have been enumerated from the judgment in Google Inc. that the words” likely to mislead” makes it very clear that it is not necessary to show that the actual deception has been made to establish the contravention. Even if the defendant has not intended to mislead contravention occurs on the part of the defendant. In the same case Hayne. J states that all misleading conducts has the application of statutory text which controls in attempting the decided cases as a rule of general application. However, the High Court held in a real estate case that an inaccurate diagram in a real estate brochure for a premium house was not misleading because it consists of an exclusion clause, but in certain cases exclusion clause is not enforeceable. Therefore, from the above-referred cases it can be said that the principles of misrepresentation varies from case to case. However, even if the statutory texts does not confirms conduct of misrepresentation we can take the principles as laid down in different precedents.

Conclusion:

Thus, Angel is advised to bring legal action against Johnny as Johnny has contravened the provisions mentioned in ACL.

b)

Issue:

Whether Angel can succeed in the trial.

Law:

According to the given case law, Section 54 applies which says that a person engaged in supplying  goods to consumer and there is a guarantee that the goods are of acceptable quality i.e. free from defects, safe and durable. As a reasonable consumer the matters for the purpose of acceptable quality means the nature of goods, the price of the goods, the statements made regarding the quality of the goods or any representation made about the goods by the manufacturer (Steinwall & Griggs,2015).

Under Section 267(2) of the ACL, the consumer may require the manufacturer for remedy for the failure to provide consumer guarantee to the consumer (Stoop,2014). The consumer may take action against the manufacturer and recover all reasonable cost incurred by the consumer. In the given case if Johnny would have failed to fulfill the consumer guarantee then the consumer may file or take action against him by way of filing suit in ACL or may ask to return money or the value of goods that the customer has purchased or re-deliver goods for to the customer. As per the consumer, law the supplier or the trader must pay compensation to the amount of loss or damaged made. According to Section 273 of the ACL states that in an action for damages an affected person may recover damages for any loss or damage suffered by the victim (Bruce, A. 2013). If any customer has received damages due to the supply of bad quality goods as alleged by Angel in the instant case. The victim would receive compensation for and to the amount he has received injury or damage. The victim may receive compensation to the amount of goods bought in case of less injury and in case of more injury, compensation amount will be fixed on the amount of injury received.

Application

According to the given case law, If Johnny have breached consumer guarantee on the quality of the food product he would be sued under the Australian Consumer Law. To determine that Johnny has breached the consumer guarantee under the Australian Consumer Law, following principles are to be considered such as due care and skill has been taken, the goods shall fit the purpose of the consumer and shall be delivered within the reasonable time. As Johnny has mentioned that he delivers quality pasta so the quality shall be reasonable as mentioned under Section 60 of the ACL (Thampapillai, 2015). For such breaches the consumer will reject the goods and ask Johnny to refund the money paid or replace the rejected goods as mentioned under Sub Section 3 of Section 259, 260 and 263 of the Australian Consumer Law. If Johnny fails to fulfill any of the remedial condition, he may be sued in the Australian Competition and Consumer Commission or the courts formed in different states under the Act. For Instance, New South Wales Fair Trading, Consumer Affairs Victoria.. Johnny may be sued under the criminal offences too under the Part 4 of ACL, but as per the provisions of the ACL says that the person alleged to have made the contravention shall be penalized under either the civil remedies or the criminal remedies (Udagepola et al., 2015). An infringer or accused cannot be punished in both the ways i.e. a victim will get remedy either through civil means i.e. by way of compensation or the victim may take the criminal way in which the infringer will be punished for such infringement for an amount not less than $10000 or may extend to $50000 ( Wallace, Pyman & Faunce,2015).

In the referred case, Angel will not succeed because there is no proof that the oil through which Johnny was making pasta was not of good quality. Moreover, Angel is not the customer of Johnny and no other customer has alleged Johnny of supplying inferior quality goods. There is no exact notion that tinned oil are of bad quality. It may seem that tinned oils are of god quality. Moreover, Angel has not tasted Johnny’s pasta and has not received any damages arising from it.

Conclusion:

Thus, it is concluded that Angel is likely not to succeed in the case. Moreover, if Johnny is to be made liable for breach of guarantee then he would have be liable to pay either civil penalties or criminal penalties.

Reference:

Bruce, A. (2013). Labelling illogic? Food Animal Welfare & the Australian Consumer Law (Part 2).

Corones, S. G. (2013). The Australian consumer law. Thomson Reuters, Lawbook Co..

Corones, S. G. (2014). Competition law in Australia. Thomson Reuters Australia, Limited.

Jones, M. (2015). Criminal procedure in Australia [Book Review]. Ethos: Official Publication of the Law Society of the Australian Capital Territory, (236), 42.

Latimer, P. (2016). Protecting consumers from unfair contract terms: Australian comparisons.

Rahman, N. A., Amin, N., & Ahamat, H. (2014). The interface between competition law and consumer protection: a Malaysian perspective. Australian Journal of Basic and Applied Sciences, 8(16), 316-323.

Steinwall, R., & Griggs, L. (2015). Australian Journal of Competition and Consumer Law. Competition and Consumer Law Journal, 23(2).

Stoop, P. N. (2014). The Overlap between the Consumer Protection Act 68 of 2008 and the National Credit Act 34 of 2005: A Comparison with Australian Law.McGregor, A., & Smit, J. (2017). Risk management: Human rights due diligence in corporate global supply chains. Governance Directions, 69(1), 16.

Thampapillai, D. (2015). THE AUSTRALIAN CONSUMER LAW. Australian Commercial Law, 374.

Udagepola, K., Xiang, L., Afzal, N., Ali, M., & Robinson, M. (2015). Case Study: Cloud Computing Consumer Protocol in Australia. J. Appl. Environ. Biol. Sci, 5(9), 76-83.

Wallace, J., Pyman, E., & Faunce, T. (2015). AUSTRALIAN COMPETITION AND CONSUMER COMMISSION v ACN 117 372 915: SHOULD CONSUMER LAW REGULATE DOCTOR-PATIENT RELATIONS IN A CORPORATISED HEALTH CARE SYSTEM?. Journal of law and medicine, 23(1), 55-66.