ARA: Retailers set for $38.

7 billion Xmas sales - fair, not great growth as interest rates hit
Posted by: Administrator on Wed, 09 December 2009 07:58:02

Peak retail industry body the Australian Retailers Association (ARA) said after a year of patchy growth, retailers were optimistic of a fair, not great 2009 Christmas period with an expected year-on-year growth of 4.7 percent, totalling $38.7 billion moving through the economy via retail sales. ARA Executive Director Russell Zimmerman said the current retail cycle was not what it was last year with a previous total spend of $36.95 billion (an increase of only 2% from 2007). He added that 2009 is an improvement, but remains challenging as 72 percent of retailers found last weeks trading met or was below expectations. Although last weeks trading did not rise above expectations for most retailers, 65 percent said last weeks trading was similar to or better than this time last year. The fact that retailers are expecting better sales than last year but are not yet meeting their targets shows there is optimism, although a significant portion of retailers are still hampered by patchy trade, Zimmerman said. The reality is that three successive interest rate rises are affecting consumers who are now less confident. According to ARA modelling and research among key sector retailers, Christmas sales for 2009 is projected as follows: 2009 national Christmas retail sales: $38.7 billion (up from 2008 - $36.95 billion) National category breakdown: food $15.47 billion, department stores $3.21

billion, apparel $2.71 billion, household $6.58 billion, hospitality $5.06 billion and other $5.67 billion. State by state Christmas 2009 retail sales: NSW $12.6 billion, VIC $9.3 billion, QLD $8.1 billion, SA $2.7billion, WA $4.1 billion, TAS $812 million, NT $386 million and ACT $735 million. The ARA has been publishing retail sales predictions using internal research modelling with consistent accuracy for over 15 years, Zimmerman said. From our research, we constantly come across a type of consumer - a conservative, thrifty and wary consumer keen on making their dollar really stretch across lower end and reduced priced products. Over the Christmas season, retailers will experience fair trade but it will be below their expectations, Zimmerman said. For over 104 years, the Australian Retailers Association (ARA) has been the peak industry body in Australias $292 billion retail sector which employs over 1.2 million people. As an incorporated employer body under the Workplace Relations Act and with a range of member services including business consulting, policy development, advocacy and education, the ARA supports and represents over 5000 members throughout Australia. Visit www.retail.org.au or call 1300 368 041.

Is that a foreign beer or a case of brewer's dupe?

Mark Russell December 21, 2008 Ads by Google

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AS THE festive cheer flows for Christmas and the new year, a storm is brewing over the labelling of premium foreign beers made in Australia. The Australian Consumers Association is demanding clearer, more prominent labels on bottles of foreign beer made locally under licence, to show drinkers exactly what they are buying. Beck's, Heineken, Stella Artois, Kirin, Guinness, Kronenbourg and Carlsberg are some of the foreign brands being made here.
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The Sunday Age bought a random selection from a liquor store in St Kilda last week. A 330 millilitre bottle of Heineken ($3.39) was brewed in Sydney and a 330 millilitre bottle of Carlsberg ($3.49), which had "Copenhagen, Denmark" and "by appointment to the Royal Danish Court" on the front, was brewed by Foster's Australia in Victoria. Two other bottles Stella Artois ($3.89) and Beck's ($3.79) had been fully imported by Melbourne wholesalers but they were also made in Australia. ACA spokesman Christopher Zinn said it was time to address the issue of labels on imported beers. "Even if (the breweries) say it tastes the same, people who buy it might claim it tastes different, so it seems fair enough you should be able to know where it's been made so you can choose accordingly," he said. Local breweries defend their right to make foreign-brand beers in Australia, claiming the beer tastes better because it is fresher. Foster's, which brews Guinness, Stella Artois, Kronenbourg and Carlsberg under licence in Australia, says the locally made product is very close to how the original beers taste overseas. Lion Nathan, which makes Heineken, Beck's and Kirin locally, claims they are brewed under strict guidelines set by the label owners and its operations are overseen by the brewers from Holland, Germany and Japan.

Spokesman James Tait said bottles were clearly labelled and did not need to be changed. He said the ACA should be more concerned about importing by unauthorised dealers involving shipments of beer.

Read more: http://www.theage.com.au/national/is-that-a-foreign-beer-or-a-case-ofbrewers-dupe-20081220-72p8.html#ixzz1NPci8PNN

legal

he Australian Consumer Law or ACL commenced on 1 January 2011, making consumer laws uniform across Australia. However, finding the actual legislation is quite tricky. The Competition and Consumer Act 2010 (Cth) includes in its Schedule 2 The Australian Consumer Law. In NSW, this Federal legislation was enacted into state legislation by the Fair Trading Amendment (Australian Consumer Law) Act 2010 (NSW). When you go to the Fair Trading Act 1987 (NSW), Part 3 of the Act is titled The Australian Consumer Law. Division 2 concerns the Application of Australian Consumer Law. The relevant sections are s 27 Australian Consumer Law text, s 28 Application of Australian Consumer Law, and s 29 Future modifications of Australian Consumer Law etc. The Australian Consumer Law website provides useful background information on the introduction and implementation of this important change to consumer protection in Australia. If you are registered with the State Library and have a Library Card, you can use AGIS Plus to find more articles. Type in 'Australian and consumer and law'. For more details about this new legislation, see our earlier post Australian Consumer Law.

Commercial Bank of Australia v Amadio [1983] HCA 14: The Amadios, an elderly couple, signed a guarantee with the bank on behalf of their son. They thought that their son's business was prosperous, when in fact it was in financial difficulties. The bank enhanced the business's appearance of solvency by selectively honouring cheques that overdrew its account. When the sons business failed, the bank sought to enforce the guarantee against the Amadios. The guarantee was set aside by the court as unconscionable. It was held that the guarantee was "manifestly disadvantageous" to the Amadios and that the bank must have been aware of this and took no steps to ensure that the Amadios were properly advised in relation to the transaction. Collection House Limited v Taylor [2004] VSC 49: An employee of Collection House contacted Taylor in 2001 about a debt that was incurred in 1992. The employee claimed that if the debt was not paid legal action might be taken against Taylor. Taylor then agreed to pay $5,000 to settle the debt. However, the next day she sought the advice of a financial counsellor and discovered that the debt was, in fact, statute barred (see: "Statute barred debts" in Chapter 8*1 Debts, for an explanation of this term). Collection House was also aware that Taylor was in difficult personal and financial circumstances at the time. Justice Nettle of the Victorian Supreme Court upheld the decision at VCAT that Collection House had engaged in unconscionable conduct in breach of section 7 of the FTA. He held that Taylor had been at a special disadvantage because of her lack of knowledge of the matters at issue and that Collection House had wrongly exploited its position of advantage.

Introduction
This section covers the main consumer protection provisions in the ACL, as well as the ASICA. These provisions regulate or prohibit a range of unfair trade practices, including: misleading and deceptive conduct (s.18 ACL; s.12DA ASICA); the making of false representations in relation to the sale of goods and services (s. 29 ACL; s.12DB ASICA); unconscionable conduct (ss.20,21 & 22 ACL; s.12CA,12CB & 12CD ASICA); and unfair terms in consumer contracts and standard form consumer contracts (ss. 23-28 ACL; ss.12BF-12BM ASICA). Consumers may find that a remedy is more easily obtained in Victoria under the FTA's application of the ACL. This is because the Victorian Civil and Administrative Tribunal (VCAT) (where Victorian consumer disputes are generally heard) is a less formal venue than a court and legal representation is usually not permitted for consumer and trader disputes relating to amounts under $10,000.

(For more information about making a complaint or obtaining a remedy at court, see: Chapter 12*4 Consumer Remedies.)

Types of goods or services regulated

Generally, the ACL applies to a "consumer". Section 3 states that a person is taken to have acquired particular goods or services as a consumer if, and only if: the amount payable for the goods or services is less than $40,000 or some other prescribed amount; or b. the goods or services were of a kind ordinarily acquired for personal, domestic or household use or consumption; or c. the goods consisted of a vehicle or trailer acquired for use principally in the transport of goods on public roads. However, this definition does not apply if the person acquired goods, or held themselves out as acquiring goods: a. b. for the purpose of re-supply; or for the purpose of using them up or transforming them, in trade or commerce: i. in the course of a process of production or manufacture; or ii. in the course of repairing or treating other goods or fixtures on land (s.3(2) ACL). a.

c. If it is claimed that a person is a consumer in any proceeding, then it is presumed that they are a consumer unless the contrary is established (s.3(10) ACL). While it is intended that the consumer protections of the ACL are to apply across the entire economy, there are some exemptions; for example insurance contracts are not capable of being made the subject of relief under the ACL or the ASICA (s.15 Insurance Contracts Act 1984 (Cth)). In addition, Part 3-2 of the ACL, which covers consumer guarantees, does not apply to contracts of insurance (s.63(b) ACL) or to gas, electricity or telecommunications services (s.65 ACL). Contracts for the supply of electricity and gas are also excluded from some aspects of coverage: (see: ss.35, 36 & 39 Electricity Industry Act 2000 (Vic); ss.42, 43 & 46 Gas Industry Act 2001 (Vic); and the Energy Retail Code).

Misleading and deceptive conduct

Section 18 of the ACL states that a person must not, in trade or commerce, engage in conduct that is misleading and deceptive or likely to mislead or deceive. The effect of section 18 is the same as that of section 52 of the TPA and, as such, the existing jurisprudence relating to section 52 remains applicable under the ACL.

DEFINITION
The terms "misleading" and "deceptive" are not defined in either Act, and the courts have not given a precise definition of misleading and deceptive conduct. Generally speaking however, the provisions of each Act are directed at conduct that consists of a misrepresentation of some kind. Importantly, it is not necessary to establish that the trader intended to mislead or deceive. A person or corporation may have engaged in conduct that was misleading or deceptive even if they have acted honestly and reasonably.

TEST
An objective test is used to decide whether conduct is misleading and deceptive. The court or tribunal will consider whether the conduct was likely to mislead or deceive members of the class or group of persons to whom the conduct was directed.

SILENCE
Silence may constitute misleading and deceptive conduct but this will depend on the circumstances of the case. For example, the courts have held that a failure to disclose information was not misleading where it was not deliberately withheld.

PUFFERY
"Puffery" is a term used by the courts to describe enthusiastic or exaggerated claims used by advertisers to promote products and services when it is obvious that the claims should not be taken seriously. The courts have held that mere "puffery" will not constitute misleading or deceptive conduct. Generally speaking, a statement is considered to be mere "puffery" if no reasonable person would take it seriously or act upon it. Examples of puffery might include phrases such as "making your dreams come true", or "best ever".

FUTURE MATTERS

The prohibition of misleading and deceptive conduct also extends to representations about future matters. The FTA requires a person who has made a statement about a future matter to show that they had reasonable grounds for making it, or it will be taken to be misleading (s.4 ACL).

DISCLAIMERS AND FINE PRINT

A person or corporation cannot simply rely on a disclaimer or exclusion clause against a misleading and deceptive conduct claim. However, it appears that in some circumstances, an express disclaimer that is prominently displayed may exclude liability for making misleading and deceptive statements in an advertisement. In Butcher v Lachlan Elder Realty Pty Ltd [2004] HCA 60, an advertisement containing two disclaimers was held to make it sufficiently clear that the real estate agent was not the source of the information that was said to be misleading in its advertisement for a property and that it was simply passing on information supplied by others. In these circumstances, the real estate agent was held not to be liable for the misleading statements contained in the advertisement. In contrast, in Australian Competition and Consumer Commission v Telstra Corporation Limited [2007] FCA 1904, Telstra made various claims about its Next G mobile network, including that it had "coverage everywhere you need it". In its defence, Telstra argued that some of the advertisements directed consumers to its website, where various disclaimers about the extent of its network's coverage could be found. The court held that this disclaimer did not prevent the conduct from being misleading or deceptive, as it did not sufficiently communicate the information to potential customers.

Prohibition of misrepresentations
Section 29 of the ACL prohibits making false representations in relation to a large number of matters with respect to goods or services, such as: price; need; standard, desirability, quality or value; history, age or place of origin; sponsorship, performance characteristics, accessories, uses of benefits; approval or affiliation; availability of repairs or spare parts;

existence, exclusion or effect of any condition, warranty, guarantee, right or remedy; and testimonials by any person.

REPRESENTATIONS IN RELATION TO THE SALE OF LAND

In connection with the sale or grant of an interest in land, section 30 of the ACL contains similar (although not so broad prohibitions) preventing: making a representation that a person has a sponsorship or affiliation they do not have; or making a false or misleading representation with respect to any of the following: the nature of the interest in land, price, location, characteristics or use that can be made of the land, and availability of facilities.

Unconscionable conduct
There are different types of unconscionable conduct under the ACL and the ASICA. The two principal types are: 1. unconscionable conduct under the "unwritten law" (s.20 ACL; s.12CA ASICA); and 2. statutory unconscionability (21 ACL; s.12CB ASICA). Importantly, section 20 of the ACL (and s.12CA ASICA) does not apply to conduct that is prohibited by sections 21 of the ACL.

1. UNCONSCIONABILITY UNDER THE "UNWRITTEN LAW"

Section 20 of the ACL (and s.12CA ASICA) states that a person must not, in trade or commerce, engage in conduct which is unconscionable within the meaning of the unwritten law from time to time. This section appears to refer to the doctrine of unconscionable dealing as it has been interpreted in case law. However, the courts have not yet settled on what constitutes unconscionable conduct "under the unwritten law" as referred to in section 20, and it may go beyond the doctrine of unconscionable dealing to include other equitable doctrines, for example, equitable estoppel. Unconscionable dealing, as interpreted in case law, occurs where two requirements are satisfied: 1. one party to a contract or transaction is under a special disability; and

the other party takes unfair advantage of that disability, either with knowledge of that disability or where the other party has "closed their eyes" to the disability. Although not an express requirement, it is apparent that the courts will more readily hold that a party has taken unconscionable advantage of a person where the transaction is extremely disadvantageous to that person.

2.

Types of special disability

The courts have found that a special disability existed, and was exploited by the other party to the transaction, in a variety of circumstances. For example, in Blomley v Ryan [1956] HCA 81 at [9], Justice Fullagar of the Federal Court described the range of circumstances to include: ...poverty or need of any kind, sickness, age, sex, infirmity of body or mind, drunkenness, illiteracy or lack of education, lack of assistance or explanation where assistance or explanation is necessary. In that case, the court set aside a contract for the sale of a farm for less than its true value because the purchasers were held to have taken advantage of the farmer's drunkenness when he signed the contract.

Case studies

Commercial Bank of Australia v Amadio [1983] HCA 14: The Amadios, an elderly couple, signed a guarantee with the bank on behalf of their son. They thought that their son's business was prosperous, when in fact it was in financial difficulties. The bank enhanced the business's appearance of solvency by selectively honouring cheques that overdrew its account. When the sons business failed, the bank sought to enforce the guarantee against the Amadios. The guarantee was set aside by the court as unconscionable. It was held that the guarantee was "manifestly disadvantageous" to the Amadios and that the bank must have been aware of this and took no steps to ensure that the Amadios were properly advised in relation to the transaction. Collection House Limited v Taylor [2004] VSC 49: An employee of Collection House contacted Taylor in 2001 about a debt that was incurred in 1992. The employee claimed that if the debt was not paid legal action might be taken against Taylor. Taylor then agreed to pay $5,000 to settle the debt. However, the next day she sought the advice of a financial counsellor and discovered that the debt was, in fact, statute barred (see: "Statute barred

debts" in Chapter 8*1 Debts, for an explanation of this term). Collection House was also aware that Taylor was in difficult personal and financial circumstances at the time. Justice Nettle of the Victorian Supreme Court upheld the decision at VCAT that Collection House had engaged in unconscionable conduct in breach of section 7 of the FTA. He held that Taylor had been at a special disadvantage because of her lack of knowledge of the matters at issue and that Collection House had wrongly exploited its position of advantage.

2. STATUTORY UNCONSCIONABILITY
In addition to the above, section 21 of the ACL (and s.12CB ASICA ) states that a person must not, in trade or commerce, in connection with the supply, or possible supply of goods or services of a kind to a person (other than a listed public company) engage in conduct that is, in all the circumstances, unconscionable. Section 22 provides the same prohibition in relation to transactions with small businesses. Once again, at the time of writing (August 2010) the courts have not yet settled on the correct interpretation of these sections; however, this type of statutory unconscionability does appear to be broader than the doctrine of unconscionable dealing as developed in case law.

Considerations to be taken into account

Section 22 of the ACL (and s.22CC ASICA) lists a number of considerations to which the court shall have regard. In brief, they are: the respective bargaining strengths of the parties; whether the consumer was required to comply with conditions not reasonably necessary for the protection of the other party; whether the consumer understood documents relating to the transaction; whether any undue influence or unfair tactics were used against the consumer; and the price and circumstances under which the consumer could have acquired the goods or services from a third party. These factors are only a guide and the list is not exhaustive. Conduct may be considered to be unconscionable where there has been serious misconduct or something clearly unfair or unreasonable: Australian Competition and Consumer Commission v Lux Pty Ltd [2004] FCA 926 (see below).

Scope

As with misleading and deceptive conduct, the prohibition applies to any conduct, not just conduct at the time of entering into a contract. However, the majority of the case law to date has dealt with procedural unfairness, that is in relation to matters leading up to the formation of a contract, rather than with the substantive unfairness of a contract itself.

Case studies

Australian Competition and Consumer Commission v Lux Pty Ltd [2004] FCA 926: The Federal Court held that Lux had breached section 51AB of the TPA when a door-todoor salesperson sold a vacuum cleaner to a woman who was illiterate. Although the court made no finding as to the woman's intellectual abilities, it held that she was a person of some vulnerability because she was illiterate and unable to understand commercial matters in any depth. He held that the salesman did not explain the terms of the contract to her and denied her the opportunity to obtain independent advice. Australian Competition and Consumer Commission v Keshow [2005] FCA 558: Members of Aboriginal communities in the Northern Territory entered into agreements for the supply of children's educational material and household goods with a supplier. The supplier arranged for the consumers to enter into open-ended periodic payment authorities for payment upon receipt by the consumer of the goods. The court found that the consumers were required to comply with conditions that were not reasonably necessary to protect the supplier's legitimate interests. Both entering into the transactions and the receipt of the periodic payments was found to be unconscionable within the meaning of section 51AB of the TPA.

Unfair contract terms

The ACL and the ASICA now regulates unfair contract terms. While unfair contract terms were previously regulated by the Victorian FTA, unfair contract terms are now regulated nationally for the first time. There are a number of differences between the new unfair contract term laws and the previous Victorian unfair contract term laws. The discussion below outlines the approach taken by the ACL and the ASICA.

WHAT IS AN UNFAIR TERM?

The ACL and the ASICA provides that unfair terms in consumer contracts are void. A term is "unfair" when it: causes a significant imbalance in the parties' rights and obligations arising under the contract; is not reasonably necessary to protect the legitimate interests of the supplier; and causes financial or non-financial detriment to a party (s.24(1) ACL; s.12BG(1) ASICA). A court must have regard to the transparency of the term and the contract as a whole in determining whether a term is "unfair" (s.24(2) ACL; s.12BG(3) ASICA). Terms that relate to the main subject matter and upfront price of the contract will not be able to be challenged under these provisions. However, payments made under a contract that are contingent on the occurrence or non-occurrence of an event are examinable under the unfair contract terms provisions (s.26 ACL; s.12BI).

TO WHAT CONTRACTS DO "UNFAIR TERM" LAWS APPLY?

The unfair term laws only apply to standard form consumer contracts. A "consumer contract" is an agreement for the supply of goods or services that is wholly or predominantly for personal, domestic or household use or consumption (s.23(3) ACL; s. 12BF(3) ASICA). This means that the agreement must relate to goods or services that are usually meant for consumers, rather than businesses, and that they are being supplied for use by consumers, rather than businesses. The court will look at the terms of a contract to work out what the purpose of use is, not the intention of the supplier: Director of Consumer Affairs Victoria v AAPT Ltd [2006] VCAT 1493. The laws do not define "standard form contracts", but in broad terms, a standard form contract will typically be one that has been prepared by one party to the contract and is not subject to negotiation between the parties, that is, it is offered on a "take it or leave it" basis. Standard form contracts are typically used in many consumer sectors, including telecommunications, finance, gyms, motor vehicles, travel and utilities. In deciding whether a contract is a standard form consumer contract, a court may take into account any matter it considers relevant. However, the court must take into account: whether one of the parties has all or most of the bargaining power; whether the contract was prepared by one party before any discussion occurred about the transaction;

whether one party was, in effect, required to either accept or reject the contract on the terms as presented; whether the other party was given any real opportunity to negotiate the terms of the contract; and whether the terms of the contract take into account the specific characteristics of the other party or the particular transaction (s.27(2) ACL; s.12BK(2) ASICA). Further, a consumer contract is presumed to be standard form unless the business relying on the term proves otherwise (that is, it is a rebuttable presumption that a consumer contract is standard form) (s.27(1) ACL; s.12BK(1) ASICA). The ACL provisions apply to all other consumer contracts, except for: certain shipping contracts; and the constitutions of companies and managed investment schemes (s.28 ACL). As a consequence of the operation of section 15 of the Insurance Contracts Act 1984 (Cth), the provisions do not apply to insurance contracts regulated by that Act.

EXAMPLES OF UNFAIR TERMS

A non-exhaustive, indicative "grey-list" of examples of types of terms that may be unfair is included in the provisions (s.25 ACL; s.12BH ASICA). These examples are subject to the unfair terms test and provide statutory guidance on issues of concern. They do not deem or presume particular types of terms to be unfair. Further examples may be added to this list by regulation. The "grey-list" of example unfair terms included are: a term that permits one party (but not the other) to avoid or limit performance of the contract; a term that permits one party (but not the other) to terminate the contract; a term that penalises one party (but not the other) for a breach or termination of the contract; a term that permits one party (but not the other) to vary the terms of the contract; a term that permits one party (but not the other) to renew or not renew the contract; a term that permits one party to vary the upfront price payable without the right of the other to terminate the contract; a term that permits one party unilaterally to vary the characteristics of the goods or services to be supplied, the interest in land to be sold or granted, or the financial products or services to be supplied; a term that permits one party unilaterally to determine whether the contract has been breached or to interpret its meaning; a term that limits one party's vicarious liability for its agents;

a term that permits one party to assign the contract to the detriment of the other without the other's consent; a term that limits one party's right to sue another party; a term that limits the evidence one party can adduce in proceedings relating to the contract; and a term that imposes the evidential burden on one party in proceedings relating to the contract. The ACCC, ASIC and the State and Territory consumer protection agencies have prepared A Guide to the Unfair Contract Terms Law, which provides further information about the unfair contract term laws, how they apply and the effect of the law. The guide can be found at www.accc.gov.au.

Case studies

Note: These case studies arise under the old Victorian unfair contract term laws, and therefore may not be applicable in relation to the new laws. Director of Consumer Affairs Victoria v AAPT Ltd [2006] VCAT 1493: President of the VCAT, Justice Morris, found a number of terms in mobile phone contracts to be unfair, including terms that enabled the supplier unilaterally to vary the terms of the contract, increase its charges or vary its product mix, without allowing the consumer to cancel the contract without penalty, and a term that enabled the supplier to end the contract for an inconsequential breach by the consumer. Free v Jetstar Airways Pty Ltd [2007] VCAT 1405: The VCAT held that a term in Jetstar's ticket conditions was unfair. The term stated that if a passenger wished to change the name of the passenger on a ticket, they would be charged the difference between the fare for the ticket originally purchased and the fare that was applicable for a ticket for the same flight route on the day that the change was made by Jetstar. This decision was overturned on appeal to the Supreme Court of Victoria and remitted to VCAT for a rehearing: Jetstar Airways Pty Ltd v Free [2008] VSC 539. Director of Consumer Affairs Victoria v Craig Langley Pty Ltd and Matrix Pilates and Yoga Pty Ltd [2008] VCAT 482: The VCAT found various terms of a fitness club's standard terms and conditions unfair. The disputed terms related to club liability, automatic renewal of membership, refunds, cancellations and bonus recovery.

EFFECT OF AN UNFAIR CONTRACT TERM

As stated, an unfair contract term is "void". This means that it should be treated as if it had never come into existence. Consumers can therefore rely on these provisions as a defence to debt collection or contract enforcement actions. Importantly, a contract containing an unfair term or a prescribed unfair term will continue to bind the parties if it can exist without that term, even though the term itself is void. Consumers can also commence their own action to enforce their rights or to recover loss or damage incurred for breach of the unfair contracts laws. The ACCC, ASIC and State and Territory consumer protection agencies also have power to apply to a court for a declaration that a term of a contract is an unfair term. If a court makes such a declaration, it may also order: an injunction; an order prohibiting payment or transfer of moneys or other property; an order to provide redress to non-party consumers; or any other order the court thinks appropriate.

Two different judgments in the case of Perpetual Trustees Victoria Limited v Monas have addressed the National Credit Code transition provisions as well as issues in respect of hardship relief and default notices relating to an action for possession by a mortgagee. The first decision Perpetual Trustees Victoria Limited v Monas [2010] NSWSC 1156 deals with transitional issues and hardship relief. What is the relevant date for determining the threshold for hardship application? The date of the application or the date of the credit contract? Judge Davies decided that the National Credit Code had not changed the position from the NSW Code: the application date is the relevant date. The result was that neither before nor after the enactment of the National Credit Code was the debtor entitled to apply for hardship relief as the amount of the loan was over the threshold at the application date. The second decision in Perpetual Trustees Victoria Limited v Monas [2011] NSWSC 57 dealt with the validity of the default notice despite it not containing exactly the words in section 80 of the Credit Code (now section 88(3)(h)). Judge Hoeben said: I am of the opinion that in order to comply with the requirements of s80, a default notice needs to provide the information set out in s80(3) but does not have to use the exact words of the section. It may have

been prudent to use the exact words of the section, but a failure to do so is not determinative of whether a default notice complies with its requirements. The default notice was held valid despite not strictly complying with section 80.

In Walker v DTGV1 Pty ltd trading as V1 Leasing (Credit) [2011] VCAT 880 the Victorian Civil and Administrative Tribunal analysed the business and legal model of V1 which traded as Motor Finance Wizard in Dandenong and concluded that in this case relating to an April 2009 transaction its sales procedures were unjust and the transaction be set aside under the Consumer Credit Code. The applicant had recently been discharged from bankruptcy. In 2009, she was receiving a disability pension from Centrelink. She lived in a house rented from the Office of Housing. The Tribunal referred to the transcript of V1s television advertising: The advertisement repeats many times the name Motor Finance Wizard and the telephone number (using the letters corresponding to the numbers which spell out 1800 CAR LOAN). It includes phrases such as banks say no Motor Finance Wizard says yes. It describes the cars for purchase in glowing terms such as runs smooth, looks great, and a real workhorse. It is directed to those with credit problems. It says even if youve had credit problems in the past or are receiving benefits, call 1800 CAR LOAN. It does not use the word lease.. Nevertheless V1 did not sell cars. It only leased used cars. V1s documentation did not disclose interest or fees and charges. The Tribunal described the consumer lease as a 14-page complex legal document accompanied by the information statement required by the Code to be provided by the lessor to the lessee under a consumer lease. There was also an extended motor vehicle warranty, the terms of which contain significant limitations on V1s liability to repair the car during the term of the lease. The Tribunal found the lease was unjust and the deposit be returned after considering the length of the stay at the dealership (the applicant was there for about 5 hours), the delay in clearly explaining what the nature of the transaction was, the speed and inadequacy of explanations of the transaction given, the lack of real choice in car selection, and the lack of real opportunity given to read or understand the consumer lease.

The Tribunal decided that the transaction was a consumer lease not a credit contract: Was the transaction between the parties a credit contract to which the Code applies? I find that it was not. It was not a sale by instalments or a loan. It was a consumer lease. Was the transaction a deemed credit contract under s10 of the Code? I find that it was not. It was a consumer lease which did not contain a right or obligation to purchase. The right to make an offer to purchase given by clause 8 of the lease, and set out in the offer to purchase form, was an offer which V1 had a discretion to accept or refuse. There is insufficient evidence for me to find that V1 had a practice of accepting all offers. On its proper construction, the consumer lease required the return of the car by Ms Walker at the end of its term, and did not give her an option only to return the car. I find that the transaction was a consumer lease. Was the transaction an attempt to avoid the credit contract related provisions of the Code, and so itself void under s169? I find that it was not. From the point of view of V1, the transaction was a genuine consumer lease. The Code does not prohibit consumer leases. It gives a choice to a business about whether to structure its transactions as credit contracts or consumer leases. To structure a transaction as a consumer lease is not to avoid the Code. National Consumer Credit Protection Act 2009