Australian Competition and Consumer Commission v Ashley & Martin Pty Ltd

The Australian Competition and Consumer Commission (ACCC) brought proceedings against Ashley & Martin Pty Ltd, alleging that certain terms of contracts entered into by consumers for medical hair loss treatment were unfair under the Australian Consumer Law (ACL). The contracts required consumers to agree to undertake and pay for a medical treatment program prior to receiving medical advice, and consumers who terminated the contracts were obliged to pay termination fees. The Federal Court was required to determine whether these contract terms were unfair under s 24(1) of the ACL, and whether any such unfairness was mitigated by s 26 of the ACL, which exempts certain terms from review. The court had to consider whether the contract terms created a significant imbalance in the parties' rights and obligations, whether they were reasonably necessary to protect the legitimate interests of Ashley & Martin, and whether they would cause financial or non-financial detriment to consumers if relied upon. Additionally, the court had to determine whether the contract terms defined the main subject matter of the contract or set the upfront price, as these terms are quarantined by s 26 from assessment as to unfairness.

The court considered the nature of the contract terms, the imbalance they created, and whether they were reasonably necessary to protect the legitimate interests of Ashley & Martin. The court found that the contract terms created a significant imbalance in the parties' rights and obligations, as consumers were required to agree to undertake and pay for the medical treatment program before receiving medical advice. The court also found that the contract terms were not reasonably necessary to protect the legitimate interests of Ashley & Martin, as there were alternative methods of protecting their interests that would not cause such significant detriment to consumers. The court considered the proportionality of the contract terms and the availability of alternative methods of protecting the interests of Ashley & Martin. The court also found that the contract terms would cause financial or non-financial detriment to consumers if relied upon, as consumers were required to pay for the medical treatment program before receiving medical advice, and were obliged to pay termination fees if they terminated the contracts. The court further found that the contract terms did not define the main subject matter of the contract or set the upfront price, and were therefore not quarantined by s 26 from assessment as to unfairness.

The court found that the contract terms were unfair under s 24(1) of the ACL, and were not exempted from review by s 26 of the ACL. The court issued an injunction prohibiting Ashley & Martin from entering into or relying on the impugned contract terms, and ordered that Ashley & Martin take steps to give effect to the injunction. The court also ordered that the parties file a minute of proposed orders to program a further hearing to address relief, and that the parties be heard as to costs. The orders were to be entered in accordance with Rule 39.32 of the Federal Court Rules 2011.