Consumer claims in Victoria are dealt with under the Australian Consumer Law and Fair Trading Act 2012. This legislation adopts in Victoria the federal scheme set out in Schedule 2 of the Competition and Consumer Act 2010 (Cth). Previously, consumer claims in Victoria came under the Fair Trading Act 1999 and the Trade Practices Act 1974.
Misleading and deceptive conduct in trade and commerce is prohibited under section 18 of the ACL. It is what is called a strict liability offence – that means it does not matter whether the person intended to mislead or deceive, but whether there was a real possibility that the consumer could have been misled or was misled. Unconscionable conduct is also prohibited under s 20 of the ACL. Unconscionable conduct occurs when there is power imbalance between the parties and one party takes advantage of this.
Section 23 of the ACL also prohibits unfair and standard form contracts. Unfair contracts occur when a consumer contract has terms which cause an imbalance in the rights of one party over another and that the terms are not necessary to protect the legitimate business interests of the trader. The term must also cause detriment (not necessarily financial) to the party if it was enforced. It will depend on the contract as a whole (because if the contract can still apply without the term it may still be valid) and how transparent the term is – that is, was it drafted clearly.
Examples under s 25 of the ACL include (but are not limited to) terms that have the effect of;
- Allowing one party to cancel the contract without penalty but not the other
- Allowing one party to vary prices or costs without letting the other party cancel the contract
- Allowing one party to renew the contract but not the other party
- Allowing one party to escape liability under relevant legislation, including the ACL
Standard form contracts are also prohibited. Matters taken into account include;
- Whether one party had all the bargaining power
- Whether there was room for negotiation or a take it or leave it approach
- Whether there were any discussions regarding the terms beforehand
Under section 223 of the ACL, VCAT (as well as any court) has jurisdiction to hear consumer and trader disputes. The ACL only applies if the goods were supplied in trade or commerce, but VCAT can hear other disputes under state legislation like the Goods Act 1958 for example. The Civil Claims List at VCAT hears cases about goods and services supplied to or by someone in Victoria. They can be brought by either purchasers or suppliers, and traders can bring disputes against other traders. Disputes between consumers and traders do not have to be for any particular amount (and this is why it is often a good idea to lodge such actions in the Tribunal rather than in the court system) but an action must be brought within six years.
Usually, in consumer claims in Victoria for claims of less than $10,000, costs cannot be awarded and legal representation is generally not permitted. VCAT can attempt to resolve the matter by Alternative Dispute Resolution, including compulsory conferences and mediation. Where a hearing is required, VCAT is not bound by the rules of evidence or typical court formality. Generally, while some matters might be heard at court, if it is more appropriate for VCAT to hear the matter the court should refer it to VCAT under section 188 of the Act. Matters that are more than $10,000 may be heard in a court.
A number of remedies are available for in a consumer claims in Victoria under section 184 the ACL. These can include temporary relief (such as injunctions and interim orders, including those which can require traders to cease trading), damages and awards of compensation, refunds and returns and orders that contracts be voided, varied or completed. However section 185 goes on to state that VCAT is not limited by this and can make orders that it feels is fair in the circumstances. In any event, you will need to prove the loss that you have suffered.
The ACL also has penalty provisions under Schedule 2. These penalty provisions are enforced by Consumer Affairs Victoria (and the Australian Competition and Consumer Commission federally) who has the power to investigate complaints made to it by consumers. Often this enforcement will be linked to matters of public concern, patterns of misbehaviour by traders or industry wide issues.