Footnotes

Chapter 1 - Introduction

[1]        This includes the TPA, the ASIC Act, the Corporations Act 2001 and various industry codes of conduct. See Brian Horrigan, 'The expansion of fairness-based business regulation', Australian Business Law Review, vol 32, 2004, p. 161.

[2]        Trade Practices Act 1974, section 51AB(1), 51AC(1b)

[3]        See Blomley v Ryan (1956) 99 CLR 362 and Commercial Bank of Australia v Amadio (1983) 151 CLR 447; 46 ALR 402: Gregg v Tasmanian Trustees Ltd (19976) 73 FCR 191; 143 ALR 328; (1997) ATPR 41 – 567; Graham Evans Pty Ltd v Stencraft Pty Ltd

[4]        Brian Horrigan, 'The expansion of fairness-based business regulation', Australian Business Law Review, vol 32, 2004, p. 164.

[5]        See the judgment of Justice Fullagher in Blomley v Ryan.

[6]        Previously, the provisions of this section were limited to transactions of $10 million or less.

[7]        Senator Nick Xenophon, Senate Hansard, 16 September 2008, p. 4791.

Chapter 2 - 'Unconscionable conduct' and the Trade Practices Act

[1]        See paragraph 1.3

[2]        (1983) 151 CLR 447 at 461.

[3]        Liam Brown, 'The impact of section 51AC of the Trade Practices Act 1974 (Cth) on commercial certainty', Melbourne University Law Review, vol 28, 2004, p. 595.

[4]        Trade Practices Revision Act 1986, No. 17

[5]        Trade Practices Legislation Amendment Act 1992, No. 222

[6]        The amendment was based on a recommendation by the House of Representatives Standing Committee on Industry, Science and Technology in its May 1997 report into fair trading: Finding a Balance: Towards Fair Trading in Australia (also known as the 'Reid Report').

[7]        Liam Brown, 'The impact of section 51AC of the Trade Practices Act 1974 (Cth) on commercial certainty', Melbourne University Law Review, vol 28, 2004, p. 600.

[8]        Associate Professor Zumbo, Submission 11, p. 15.

[9]        Simply No-Knead and Cameron Bates [2000] FCA 1365, [51]; ACCC News Release dated 25 September 2000, <www.accc.gov.au.>

[10]      (1999) 21 ATPR

[11]      Liam Brown, 'The impact of section 51AC of the Trade Practices Act 1974 (Cth) on commercial certainty', Melbourne University Law Review, vol 28, 2004, p. 614.

[12]      (2000) 22 ATPR

[13]      Liam Brown, 'The impact of section 51AC of the Trade Practices Act 1974 (Cth) on commercial certainty', Melbourne University Law Review, vol 28, 2004, p. 616.

[14]      Associate Professor Zumbo, Proof Committee Hansard, 3 November 2008, p. 4.

[15]      This is what Liam Brown has referred to as the 'scattergun' approach. He notes that it is not surprising that these cases have rarely succeeded. 'The impact of section 51AC of the Trade Practices Act 1974 (Cth) on commercial certainty', Melbourne University Law Review, vol 28, 2004, p. 613.

[16]      Liam Brown, 'The impact of section 51AC of the Trade Practices Act 1974 (Cth) on commercial certainty', Melbourne University Law Review, vol 28, 2004, p. 621.

[17]      Justice Paul Finn, 'Unconscionable conduct?', UNISA Trade Practices Workshop – 2006

[18]      Professor Bryan Horrigan, 'The expansion of fairness-based business regulation', Australian Business Law Review, vol 32, 2004, p. 169.

[19]      James Davidson, 'Unfair contract terms and the consumer: A case for proactive regulation?', Competition and Consumer Law Journal, vol. 15, No. 1, August 2007, pp. 74–92.

[20]      Australian Competition and Consumer Commission, Submission 27, p. 2.

Chapter 3 - The need to broaden the 'unconscionable conduct' provisions

[1]        As with section 51AA, 51AC requires a great disparity of bargaining power.
Associate Professor Frank Zumbo, Proof Committee Hansard, 3 November 2008, p. 3.

[2]        Associate Professor Frank Zumbo, Proof Committee Hansard, 3 November 2008, p. 3.

[3]        Associate Professor Frank Zumbo, Proof Committee Hansard, 3 November 2008, p. 4.

[4]        ACCC v CG Berbatis Holdings Pty Ltd [2000] FCA. The Berbatis case concerned the requirement of lessors of a shopping centre for their tenants to abandon proceedings against landlords in exchange for the landlords' consent to renew their leases. The tenants in this case wanted to sell their business to have the time and money to care for an ill family member. They were in a weaker bargaining position than the landlords. However, their lease still had 12 months to run, and a sale with this lease period was unattractive relative to a new term. They could not sell their business without the landlords' agreement and the landlords refused to renew the lease without settlement of the dispute by the tenants to drop their claim.

The case was litigated on the basis on section 51AA with the trial judge, Justice French, ruling that 'a landlord cannot use its legal rights unfairly to exploit the disadvantage of a vulnerable tenant so that the tenant is compelled to abandon bona fide claims it may have against the landlord arising out of its existing lease'. Justice French described the special disadvantage suffered by the tenants as 'situational' rather than 'constitutional' or 'personal'. On appeal, the Full Federal Court and the High Court disagreed with this finding that the tenants were under a special disadvantage (as per section 51AA). Justice Gleeson considered that the tenants simply suffered from 'a lack of ability to get their own way'. However, Justice Kirby dissented believing that the tenants were in a position of serious 'situational' disadvantage. See Brian Horrigan, 'The expansion of fairness-based business regulation', Australian Business Law Review, vol 32, 2004, pp. 184–185.

[5]        Associate Professor Zumbo told the committee that the problem with the Berbatis case was that it was run under section 51AA of the TPA. He argued that the timing of the case prevented a ruling under section 51AC, which meant the court was constrained in what it could rule under section 51AA. Proof Committee Hansard, 3 November 2008, p. 3.

[6]        Pharmacy Guild of Australia, Submission 16, p. 5.

[7]        Motor Trades Association of Australia, Submission 3, p. 3.

[8]        Mr Borradale, Submission 1, p. 1.

[9]        Post Office Agents Association Limited, Submission 6, p. 3.

[10]      Australian Competition and Consumer Commission v Simply-No-Knead,
Australian Competition and Consumer Commission v Dataline.net.au Ltd: http://www.accc.gov.au/content/index.phtml/itemId/800483

[11]      Australian Competition and Consumer Commission, 'Competition and fair trading: a fair go for small business', National Small Business Summit, 3 July 2007.

[12]      Consumer Action Law Centre, Submission 23, p. 9.

[13]      Mr Delaney, Proof Committee Hansard, 3 November 2008, p. 30.

[14]      Council of Small Business of Australia, Submission 31, pp. 4–5.

[15]      Submission 3

[16]      Submission 6

[17]      Submission 9

[18]      Submission 24

[19]      Submission 31

[20]      The Hon. Anthony Fels, Retail Shops and Fair Trading Legislation Bill, Second Reading, Legislative Assembly, Parliament of Western Australia, 9 May 2006, p. 2291.

[21]      Associate Professor Frank Zumbo, Proof Committee Hansard, 3 November 2008, p. 4.

[22]      Associate Professor Frank Zumbo, Submission 11, p. 12.

[23]      Associate Professor Frank Zumbo, Submission 11, p. 5.

[24]      NARGA, Submission 9, p. 6.

[25]      MTAA, Submission 3, p. 5. Emphasis added.

[26]      Mr Delaney, Proof Committee Hansard, 3 November 2008, p. 30.

[27]      Economic and Finance Committee, Parliament of South Australia, Franchises, 6 May 2008, p. 44.

[28]      Parliament of Western Australia, Legislative Assembly Hansard, 24 November 2005, pp. 7716–7730.

[29]      The states' retail tenancies legislation reflects the unconscionable conduct provisions of the Trade Practices Act 1974.

[30]      Law Institute of Victoria, Submission, Retail Tenancy Lease Market in Australia Inquiry, Productivity Commission, 26 July 2007, https://www.liv.asn.au/members/sections/submissions/20070726_61/20070726_Productivity%20Commission.pdf

[31]      National Retail Association, Submission, Retail Tenancy Lease Market in Australia Inquiry, Productivity Commission, 26 July 2007, http://www.pc.gov.au/__data/assets/pdf_file/0010/66349/sub047.pdf

[32]      New South Wales Department of State and Regional Development, Issues affecting the retail leasing industry in NSW, Discussion Paper, April 2008, p. 20.

[33]      New South Wales Department of State and Regional Development, Issues affecting the retail leasing industry in NSW, Discussion Paper, April 2008, p. 20.

[34]      Associate Professor Frank Zumbo, Submission 11, p. 20.

[35]      N. Seddon and M. Ellinghaus, Cheshire & Fifoot's Law of Contract (8^th Australian Ed., LexisNexis Butterworths, Australia, 2002), pp. 1135–1137.

[36]      Brian Horrigan, 'The expansion of fairness-based business regulation, Australian Business Law Review, vol 32, 2004, p. 161.

[37]      Professor Bryan Horrigan, Submission 15, pp. 8–9.

[38]      Associate Professor Frank Zumbo, Submission 11, p. 13.

[39]      Mr Ken Henrick, Proof Committee Hansard, 3 November 2008, p. 26.

[40]      Mr Gerard van Rijswijk, Proof Committee Hansard, 3 November 2008, p. 26.

[41]      NARGA, Submission 9, p. 5.

[42]      House of Representatives Committee on Industry, Science and Technology, Finding a Balance: Towards fair trading in Australia, 1997, p. xxvi.

[43]      Senator the Hon. Peter Cook, Senate Hansard, 1 April 1998, p. 1704.

[44]      Ms Jenny Buchan, Confidential submission.

[45]      Ms Jenny Buchan, Proof Committee Hansard, 3 November 2008, p. 39.

[46]      Dr Cousins and Mr Bhojani, Submission 30, p. 4.

[47]      Dr Cousins and Mr Bhojani, Submission 30, p. 4.

[48]      Consumer Action Law Centre, Submission 23, p. 9.

[49]      Consumer Action Law Centre, Submission 23, p. 10.

[50]      Consumer Action Law Centre, Submission 23, pp. 9–10.

Chapter 4 - Arguments against amending section 51AC

[1]        Shopping Centre Council of Australia, Submission 17, p. 3.

[2]        Shopping Centre Council of Australia, Submission 17, pp. 4–5.

[3]        Franchise Council of Australia, Submission 19, p. 2.

[4]        Law Council of Australia, Submission 28, p. 1.

[5]        Colonial First State Property Management, Submission 2, p. 1.

[6]        Franchise Council of Australia, Submission 19, p. 8.

[7]        Productivity Commission, The Market for retail tenancy leases in Australia, August 2008, p. xxiv.

[8]        Shopping Centre Council of Australia, Submission 18, p. 1.

[9]        Dr Cousins and Mr Bhojani, Submission 30, p. 1.

[10]      Law Council of Australia, Submission 28, p. 2.

[11]      Law Council of Australia, Submission 28, p. 4.

[12]      Shopping Centre Council of Australia, Submission 18, p. 7.

[13]      Shopping Centre Council of Australia, Submission 18, p. 9.

[14]      Law Council of Australia, Submission 28, p. 6.

[15]      Law Council of Australia, Submission 28, p. 2.

[16]      Law Council of Australia, Submission 28, p. 6.

[17]      Shopping Centre Council of Australia, Submission 17, pp. 11–12.

[18]      Shopping Centre Council of Australia, Submission 17, p. 12.

[19]      Franchise Council of Australia, Submission 19, p. 1.

[20]      Franchise Council of Australia, Submission 19, p. 2.

[21]      Franchise Council of Australia, Submission 19, p. 1.

[22]      Shopping Centre Council of Australia, Submission 18, p. 15.

[23]      Mr Scott Gregson, Proof Committee Hansard, 3 November 2008, p. 9.

[24]      Mr Scott Gregson, Proof Committee Hansard, 3 November 2008, p. 9.

[25]      Freehills, Submission 21, p. 1.

[26]      The judgment was made on the basis of a technical problem in relation to whether the relevant conduct was in 'trade or commerce'.

[27]      Freehills, Submission 21, p. 2.

Chapter 5 - The committee's view

[1]        Professor Horrigan, Proof Committee Hansard, 3 November 2008, p. 13.

[2]        See Joint Committee on Corporations and Financial Services, Inquiry into the Franchising Code of Conduct, December 2008.
https://www.aph.gov.au/Senate/committee/corporations_ctte/franchising/submissions/sublist.htm

[3]        See also, Productivity Commission, The Market for retail tenancy leases in Australia, August 2008.

[4]        Professor Bryan Horrigan, Submission 15, p. 8.

[5]        Pharmacy Guild of Australia, Submission 16.

[6]        Professor Bryan Horrigan, Submission 15, p. 8.

[7]        Dr Cousins and Mr Bhojani, Submission 30, p. 4.

[8]        Consumer Law Action Centre, Submission 23, p. 1.

[9]        Professor Bryan Horrigan, Submission 15, p. 18.

[10]      Professor Bryan Horrigan, Proof Committee Hansard, 3 November 2008, p. 23.

[11]      Professor Bryan Horrigan, Submission 15, p. 9.

[12]      Inquiry into the need and scope for a definition of unconscionable conduct in the Trade Practices Act, Terms of reference, https://www.aph.gov.au/Senate/committee/economics_ctte/tpa_unconscionable_08/info.pdf

[13]      Professor Bryan Horrigan, Submission 15, p. 10.

[14]      Senate Economics Committee, The effectiveness of the Trade Practices Act 1974, 1 March 2004, p. xv. The minority report agreed with the majority:

[15]      The Hon. Peter Reith, Second Reading Speech, House of Representatives Hansard, 3 December 1998, p. 11884.

[16]      Professor Bryan Horrigan, Proof Committee Hansard, 3 November 2008, p. 22.

[17]      Professor Bryan Horrigan, Proof Committee Hansard, 3 November 2008, p. 18.

[18]      This is notwithstanding the focus on some judges on interpreting section 51AC(3) such that conduct that is 'fair' or 'clearly unfair' is taken into account. See Justice Paul Finn, 'Unconscionable conduct?', UNISA Trade Practices Workshop, 2006, pp. 14–15.

[19]      NARGA, Submission 9, p. 3.

[20]      These conditions are the basis for NARGA's definition of 'unconscionable conduct'.

[21]      House of Representatives Committee on Industry, Science and Technology, Finding a Balance: Towards fair trading in Australia, 1997, p. xv.

[22]      Professor Bryan Horrigan, Proof Committee Hansard, 3 November 2008, p. 22.

[23]      Mr Scott Gregson, Proof Committee Hansard, 3 November 2008, p. 9.

[24]      Senate Standing Committee on Economics, Trade Practices Legislation Amendment Bill 2008 [Provisions], August 2008, p. 18.

[25]      Mr Scott Gregson, Proof Committee Hansard, 3 November 2008, p. 9.

[26]      See the ruling of Justice Gordon in Jobern Pty Ltd v BreakFree Resorts (Victoria) Pty Ltd, [2007] FCA 1066 (23 July 2007).

[27]      Professor Bryan Horrigan, Proof Committee Hansard, 3 November 2008, p. 22.

[28]      Professor Bryan Horrigan, Proof Committee Hansard, 3 November 2008, p. 17.

[29]      Professor Bryan Horrigan, Proof Committee Hansard, 3 November 2008, p. 18.

[30]      Motor Trades Association of Australia, Submission 3, p. 5.

[31]      Mr van Rijswijk, Proof Committee Hansard, 3 November 2008, pp. 26–27.

Additional comments by Coalition Senators and Senator Nick Xenophon

[1] See paragraph 6.73, p 181 of the Fair Trading Report which may be accessed at https://www.aph.gov.au/house/committee/isr/Fairtrad/report/CHAP6.PDF

[2] See Frank Zumbo, "Commercial Unconscionability and Retail Tenancies: A State and Territory perspective," (2006) Trade Practices Law Journal, Vol. 14, p 165 at p. 172.

[3]        Associate Professor Frank Zumbo, Submission 11, p. 13.

[4] Associate Professor Zumbo Submission 11,  p. 22