Australian Consumer law And Business Law - Myassignmenthelp.Com

Question: Discuss about the Australian Consumer law And Business Law. Answer: Issue The key issue of this case relates to the possible breach of the provisions covered under the Australian Consumer Law by Avanat Developments, regarding the lease of kisosk to Amaroo located at the local Wulangi Shopping Centre. Law The Competition and Consumer Act, 2010 (Cth) is the act protecting the interests of consumers in Australia and also ensures that a healthy competition prevails. Under Schedule 2 of this act, is the Australian Consumer Law (ACL), which particularly works towards the interests of the consumers, and gives them different rights which protect their interests. Under section 20 to 22 of ACL are covered the provisions regarding unconscionable conduct. As per section 20 of this act, an individual should refrain from indulging in such a conduct, in trade or commerce, which is unconscionable. This is within the meaning of unwritten law of the States and Territories from time to time. This unwritten law here denotes the common law and equity. Unconscionable conduct is something where the contracting parties are not at equal position. In other words, one of the parties could have a higher bargaining power which allows them to exploit a special disadvantage of other person in a knowing manner. Under the common law, there are certain pre-requisites for unconscionable conduct. These are: The weaker party holds the position of special disability, which includes sickness, emotional dependence, and lack of education, illiteracy, drunkenness, poverty, sex and age. The stronger part had clear knowledge about the special disability of the weaker party, or should have known about it. Lastly, an unfair advantage was taken by the stronger party of the special disability of the weaker party. When such a thing happens, the court could set aside the contract or could also rewrite the contract in order to make certain that there is fairness to the parties. Just the present of special disadvantage would not be deemed as unconscionable but the same has to cause a disadvantage to the weaker party owing to the advantage taken by the stronger party. This can be further enlightened through the case laws. Commercial Bank of Australia Ltd v Amadio is an example of this. In this case, there were two elderly parents of Italian origin and had limited knowledge of English. They were persuaded by their son and the bank for guaranteeing and mortgaging the home to bank as a security for bank loan. The parents though there liability was limited; but the true position was that it was unlimited and the bank and the son failed to disclose this. When the matter reached the court, the court held that there was presence of unconscionable conduct. Had the parents been aware of the real occurrence, they would not have signed the contract. Here the special disadvantage of the parents was limited competence in English, which was taken advantage of, in an unfair manner, by the bank. Section 21 puts a restriction on businesses from engaging in conduct which is unconscionable regarding commercial supply of services or goods, in both business transactions and in domestic or commercial transactions. The terms of contract and the contract being carried on are the terms which are taken into account by the court for holding whether the conduct is unconscionable. The factors which determine the unconscionable conduct are covered under section 22, which includes the bargaining strength of supplier and consumer, consumer required to follow unnecessary condition, consumer being able to read the documents regarding the services or goods being supplied, presence of unfair tactics to pressure the consumer, amongst the other things. In ACCC v Lux Pty Ltd, the consumer was intellectually disabled and was also illiterate. This disability was known to the vacuum cleaner salesman and he filed the credit application form, along with the purchase contract and did not recommend the consumer regarding getting independent advice before this legal document was signed. The salesman dominated the consumer and this led to the ACCC brining a case of unconscionable conduct against him. His was upheld by the court owing to the relative bargaining strength of the party. This was due to the no real opportunity being present with weaker party for bargaining, the contract being one sided and the sale technique being disadvantageous for consumer. Application In the given case study, in order to hold Avanat Developments liable, there is a need to show that unconscionable conduct was undertaken by them against Amaroo. Based on section 20 of ACL, there is a need to apply the three conditions for establishing unconscionable conduct as these are the pre-requisites. Here, Amaroo was at a special disadvantage as he spoke aboriginal language and could only understand a limited amount of English. Also, he was not an expert in financial or business matters. This lack of education and lack of knowledge regarding English was Amaroos special disability. Steve was the representative of Avanat Developments and he had clear knowledge of the fact that Amaroo did not understand English properly and that he also did not understand such typical business or financial terms. Yet, Steve took advantage of this weak position of Amaroo by putting complex terms in the lease which Amaroo did not understand. This satisfies the conditions put in section 21 which woul d enable Amaroo to make application to t he court for getting the contract, i.e., the lease set aside, or for the same to be rewritten. This can be supported through the case of Commercial Bank of Australia Ltd v Amadio, as in both the cases, the weaker party had the disability of limited knowledge of English. Here also Amaroo was persuaded by Steve to go forward with the lease and the true position was not told to him. Steven failed to inform Amaroo that he was the only one who was being charged at a rate which was 30% higher than all the other occupants in the Food Court. Steven also failed in informing Amaroo about the scheduled refurbishment after two months of lease, where the food court would be closed, when all the other tenants had been advised about the same. In case Amaroo known about all these, he would not have entered into the lease. The special disadvantage of Amaroo was thus taken advantage of by Steven in an unfair manner. As Steve represented a business, he was bounded by section 21 to not indulge in unconscionable conduct in the lease transaction. Based on section 22, Steve held a higher bargaining strength owing to special disability of Amaroo; Amaroo could read the documents but could not understand the same due to his lack of financial and business knowledge, and he was asked to follow an unnecessary condition of 30% higher rent. So based on these two sections, the conduct of Steve was unconscionable. Again, applying the discussed case law of ACCC v Lux Pty Ltd, the disability was known to Steve and yet he included complex business terms in the lease. He failed to advice Amaroo to take legal help regarding the lease, to get a better hold on the terms of the lease. Essentially, Amaroo had no real opportunity for bargaining, the conduct of Steve was one sided and the approach adopted by him was disadvantageous for Amaroo. Conclusion Thus, based on the application of the Laws to the facts given in the case study, Avanat Developments breached the provisions of Australian Consumer Law, regarding the lease of kisosk to Amaroo owing to the undertaken unconscionable conduct. Issue The key issue of this case revolves around the liability of Darwin Rail for the injuries sustained by Amaroo and the loss of $30,000 to him based on Civil Liability Act and the established cases. There are five different issues in this case: Presence of duty of care? Breach of duty of care? Harm suffered or damages? Available defences? Damages/ remedies? Law The Civil Liability Act, 2003 (QLD) (Act) brought certain changes to the laws regarding negligence, in different contexts including care, contributory negligence, assessment of damages, causation and voluntary assumption of risk. Despite the applicability of the statute, the principles of negligence covered in common law, prevail. Negligence is basically the breach of duty of care owed by X to Y due to the activities undertaken by X having the capacity of harming Y. The elements of negligence include duty of care, breach of duty of care, causation, and remoteness of damage. Presence of duty of care Donoghue v Stevenson helps in establishing duty of care as neighbour principle was brought with this case. The court stated in this case that there was a need to take reasonable care for avoiding the omissions or acts which could reasonably foresee which could injure the neighbour. For duty of care, there has to be reasonable foreseeability of the risk of harm, along with there being a relationship of vulnerability and control. In this regard, the defendant and plaintiff need to be in such proximity where the actions of one could have an impact over the other as per Jaensch v Coffey. Also, based on Swain v Waverley Municipal Council, the duty of care where the defendant is in such a position where they have to protect the interests of the plaintiff. The duty of care is not present, when there is an obvious risk of harm covered under section 13(1) of the Act as per Borland v Makauskas. Section 15 provides that there is no duty of warning about the obvious risks. A risk becomes obvious when it is a common knowledge based on section 13(2). Further, section 13(3) dictates that it would be obvious even when the chances of the same happening are low. Breach of duty of care Once duty of care is established, the breach of the same has to be shown. Section 9(1) provides that there has to be foreseeability of risk of harm, the risk of harm has to be significant and a reasonable individual would take precautions against the risk of harm. Once these three conditions are fulfilled, breach of duty of care can be established. An example of this is Paris v Stepney Borough Council, where section 9(2) was fulfilled regarding possibility of harm. For professionals, no breach happens when the standards are followed based on section 22 and Dobler v Halverson. Harm suffered or damages The third requirement is to show that the plaintiff was injured due to breach of duty by the defendant. Section 11(1) puts the requirement of factual causation. Relying upon Barnett v Chelsea and Kensington Hospital Management Committee, but for test is covered under section 11(3). Section 11(4) puts the requirement of remoteness of losses based on Wagon Mound Case No 1. These three factors combine to make a claim of negligence. Available defences When a claim of negligence is made by the plaintiff, the defendant can make use of the available defences. The first one is contributory negligence covered under section 23, where it is shown that the plaintiff failed in taking reasonable care towards preventing the harm caused to them. The other defence is voluntary assumption of risk, where the plaintiff takes the risk even when they are aware of the risk of harm. Damages/ remedies In cases of contributory negligence, the damages are assessed by the court by calculating the total damages which are payable to the plaintiff where there had been no contributory negligence and the liability is apportioned between the plaintiff and defendant in percentage terms. In cases of voluntary assumption of risk, no damages are awarded to the plaintiff. Application Presence of duty of care In this case, based on the case of Donoghue v Stevenson, there was a reasonable foreseeability of risk of harm as the application of paint on the edges of stairs made the stairs prone to slippage upon being wet. Based on Swain v Waverley Municipal Council, Darwin Rail was required to protect all of the people who crossed the platform and the stairs. There was a relationship based on Jaensch v Coffey between Darwin Rail Amaroo as he crossed the train station on which the renovation work had been undertaken by Darwin Rail. So, where the work done by Darwin Rail was not done in a careful manner and the requisite warning signs were not put at the staircase, there was a clear possibility of Amaroo or any other person passing the stairs, slipping. Here, a contention can be made that there was an obvious risk of harm for the stairs being slippery owing to rainy day and the stairs being wet, which would satisfy the conditions put in section 13(2) and 13(3), which would mean that Darwin Rail had no duty to Amaroo to warn him about the risk of harm. However, here the stairs had been painted, which was not a common knowledge, making this risk of harm, not obvious. Thus, a duty of care was present. Breach of duty of care Here, Darwin Rail was professional but they did not put up the sign as per standards (assumption) thus breaching section 22. There was a foreseeable risk of harm as established earlier, which had possibility of majorly injuring the parties, and failed in taking the requisite precautions in terms of putting up the danger sign or a sign warning about risk of harm. A reasonable person would have done so and as this was not done, based on Paris v Stepney Borough Council, a breach of duty of care would be established. Harm suffered or damages Based on section 11, here Darwin Rail breached their duty by not putting the warning sign, which resulted in Amaroo falling down the stairs and getting injured. However, due to this action of Darwin Rail, he did not get the gambling loss, so there was no factual causation in this case for the loss of $30,000 in gambling. As per the but for test, Amaroo would not have been injured, had the warning sign been placed by Darwin Rail. However, the same cannot be stated for the gambling part, as Amaroo could have gotten addicted from a number of reasons. The physical injuries were thus not remote, but the monetary loss due to gambling was remote. Available defences It is very clear that Amaroo was busy on phone and was carrying heavy stuff, while coming down the stairs. He failed to take care of his own self, by holding the sidebar of stairs to prevent him from falling. This contribution would result in defence of contributory negligence being available to Darwin Rail based on section 23. However, Amaroo was not aware of risk of harm caused by Darwin Rail and did not consent to it in any way, thus declining the possibility of applying voluntary assumption of risk. Damages/ remedies Here, based on the negligence of Darwin Rail, Amaroo can claim damages for his injuries and the unexpected medical expenses, in addition to the depression and anxiety caused to him. However, he would not be able to claim damages for the lost $30,000 for gambling. Also, the damages awarded to him would be proportionately reduced based on his contributory negligence. Conclusion Thus, Darwin Rail is liable for the injuries sustained by Amaroo, but not for the loss of $30,000 caused to Amaroo based on Civil Liability Act and the established cases.