Commissioner for Consumer Protection v Starland Management Pty Ltd as director of Rolf Gerard Voulon
[2022] WASC 96
•17 MARCH 2022
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CIVIL
CITATION: COMMISSIONER FOR CONSUMER PROTECTION -v- STARLAND MANAGEMENT PTY LTD as director of ROLF GERARD VOULON [2022] WASC 96
CORAM: TOTTLE J
HEARD: 1 MARCH 2022
DELIVERED : 1 MARCH 2022
PUBLISHED : 17 MARCH 2022
FILE NO/S: CIV 3065 of 2019
BETWEEN: COMMISSIONER FOR CONSUMER PROTECTION
Plaintiff
AND
STARLAND MANAGEMENT PTY LTD as director of ROLF GERARD VOULON
First Defendant
ROLF GERARD VOULON
Second Defendant
Catchwords:
Competition and consumer law - Australian Consumer Law (WA) - Unfair contract terms - Where the plaintiff contended that certain terms of consumer contracts were 'unfair' within the meaning of s 24 of the Australian Consumer Law (WA) - Where the parties reached agreement concerning proposed declarations and relief - Agreed declarations and orders made
Legislation:
Australian Consumer Law (WA), s 23, s 24, s 25, s 232, s 233, s 239, s 250
Result:
Declarations made
Permanent injunctions granted
Redress orders madeCategory: B
Representation:
Counsel:
Plaintiff : W A S Keane First Defendant : F J Mestichelli Second Defendant : F J Mestichelli Solicitors:
Plaintiff : Department of Mines, Industry Regulation and Safety - Consumer Protection Division (In House Legal Counsel) First Defendant : Corporate Counsel Lawyers Second Defendant : Corporate Counsel Lawyers Case(s) referred to in decision(s):
Australian Competition and Consumer Commission v Chrisco Hampers Australia Ltd [2015] FCA 1204; (2015) 239 FCR 33
Australian Competition and Consumer Commission v CLA Trading Pty Ltd [2016] FCA 377
Australian Competition and Consumer Commission v Coles Supermarkets Australia Pty Ltd [2014] FCA 1405
Australian Competition and Consumer Commission v Smart Corporation Pty Ltd [No 3] [2021] FCA 347; (2021) 153 ACSR 347
Commonwealth v Director, Fair Work Building Industry Inspectorate [2015] HCA 46; (2015) 258 CLR 482
Foster v Australian Competition and Consumer Commission [2006] FCAFC 21; (2006) 149 FCR 135
ICI Australia Operations Pty Ltd v Trade Practices Commission (1992) 38 FCR 248
OPR WA Pty Ltd v Marron [2016] WASC 395
TOTTLE J:
Overview
1The plaintiff (the Commissioner) commenced this action in his capacity as the regulator under the Australian Consumer Law (WA) (the ACL) for declaratory and other relief relating to the terms upon which the first defendant (Starland) entered into contracts with consumers for the rental of residential accommodation. The Commissioner alleged that certain terms included by Starland in its contracts were unfair within the meaning of s 24 of the ACL.
2The action was defended originally but following a mediation the Commissioner amended his statement of claim and Starland and the second defendant (its sole director and secretary, Mr Voulon) filed and served a substituted defence in which they admitted the allegations made against them and consented to the relief sought by the Commissioner. Although it came rather late in the proceedings the defendants are to be commended for their decision not to continue to contest the Commissioner's claims.
3The critical facts can be summarised as follows. Starland is the registered proprietor of the business name 'Perth Room Rentals' and under that name has been engaged in the business of providing rental accommodation. Between January 2017 and November 2019 Starland entered into contracts with consumers for the rental of residential properties (including rooms in shared rental accommodation) on terms contained in:
(a)a four-page document headed 'Holiday Accommodation Application and Agreement Form' (the Holiday Accommodation Terms); and
(b)a two-page document headed 'Lodging Accommodation License' [sic] (Lodging Licence) and a four-page document headed 'Lodging License Terms and Conditions' [sic] (Lodging T&Cs) (collectively, the Lodging Terms).
4The Commissioner identified 10 contracts between Starland and consumers entered into using the Holiday Accommodation Terms. These included a contract with Mr David Breen who paid Starland a rental bond of $1,200 and rent in advance of $300. Starland relied on the Holiday Accommodation Terms to justify withholding the refund of these amounts to Mr Breen. The Commissioner identified six contracts between Starland and consumers entered into using the Lodging Terms.
5I am satisfied that the Holiday Accommodation Terms and the Lodging Terms included terms that were unfair for the reasons given by the Commissioner and which were accepted by the defendants. This is a case in which it is appropriate to grant the relief sought by the Commissioner.
The legislative framework and guiding principles
Unfair terms
6The critical provisions of the ACL are s 23, s 24 and s 25. Section 23 is as follows:
23Unfair terms of consumer contracts and small business contracts
(1)A term of a consumer contract or small business contract is void if:
(a)the term is unfair; and
(b)the contract is a standard form contract.
(2)The contract continues to bind the parties if it is capable of operating without the unfair term.
(3)A consumer contract is a contract for:
(a)a supply of goods or services; or
(b)a sale or grant of an interest in land;
to an individual whose acquisition of the goods, services or interest is wholly or predominantly for personal, domestic or household use or consumption.
7It is not in dispute that the relevant contracts were standard form contracts for the purposes of s 23(1)(b) of the ACL.
8Section 24 of the ACL defines 'unfair'. It states:
24Meaning of unfair
(1)A term of a consumer contract or small business contract is unfair if:
(a)it would cause a significant imbalance in the parties' rights and obligations arising under the contract; and
(b)it is not reasonably necessary in order to protect the legitimate interests of the party who would be advantaged by the term; and
(c)it would cause detriment (whether financial or otherwise) to a party if it were to be applied or relied on.
(2)In determining whether a term of a contract is unfair under subsection (1), a court may take into account such matters as it thinks relevant, but must take into account the following:
(a)the extent to which the term is transparent;
(b)the contract as a whole.
(3)A term is transparent if the term is:
(a)expressed in reasonably plain language; and
(b)legible; and
(c)presented clearly; and
(d)readily available to any party affected by the term.
(4)For the purposes of subsection (1)(b), a term of a contract is presumed not to be reasonably necessary in order to protect the legitimate interests of the party who would be advantaged by the term, unless that party proves otherwise.
9Examples of 'unfair' terms are provided for at s 25 of the ACL. The most relevant examples to these proceedings are at s 25(a) - (d) which are as follows:
25Examples of unfair terms
Without limiting section 24, the following are examples of the kinds of terms of a consumer contract or small business contract that may be unfair:
(a)a term that permits, or has the effect of permitting, one party (but not another party) to avoid or limit performance of the contract;
(b)a term that permits, or has the effect of permitting, one party (but not another party) to terminate the contract;
(c)a term that penalises, or has the effect of penalising, one party (but not another party) for a breach or termination of the contract;
(d)a term that permits, or has the effect of permitting, one party (but not another party) to vary the terms of the contract;
10In Australian Competition and Consumer Commission v Chrisco Hampers Australia Ltd,[1] Edelman J considered the approach to be taken to the application of s 24, stating that it was a legislative technique that 'creates broad evaluative criteria to be developed incrementally'.[2] His Honour stated that when assessing whether a term causes a significant imbalance it is relevant to consider whether any burden that the contract imposes on the consumer is matched by a corresponding right or (as a correlative) a corresponding duty on the supplier.[3]
[1] Australian Competition and Consumer Commission v Chrisco Hampers Australia Ltd [2015] FCA 1204; (2015) 239 FCR 33.
[2] Australian Competition and Consumer Commission v Chrisco Hampers Australia Ltd (40 - 41).
[3] Australian Competition and Consumer Commission v Chrisco Hampers Australia Ltd (44).
11In Australian Competition and Consumer Commission v CLA Trading Pty Ltd,[4] Gilmour J summarised the relevant principles concerning s 24 and s 25 of the ACL as follows:[5]
(a)the underlying policy of unfair contract terms legislation respects true freedom of contract and seeks to prevent the abuse of standard form consumer contracts which, by definition, will not have been individually negotiated: Jetstar Airways Pty Ltd v Free [2008] VSC 539 at [112];
(b)the requirement of a 'significant imbalance' directs attention to the substantive unfairness of the contract: Director-General of Fair Trading v First National Bank plc [2002] 1 AC 481 at [37];
(c)it is useful to assess the impact of an impugned term on the parties' rights and obligations by comparing the effect of the contract with the term and the effect it would have without it: Director-General of Fair Trading v First National Bank plc at [54];
(d)the 'significant imbalance' requirement is met if a term is so weighted in favour of the supplier as to tilt the parties' rights and obligations under the contract significantly in its favour - this may be by the granting to the supplier of a beneficial option or discretion or power, or by the imposing on the consumer of a disadvantageous burden or risk or duty: Director-General of Fair Trading v First National Bank at 494 [17] per Lord Bingham, applied in ACCC v ACN 117 372 915 Pty Ltd (in liq) (formerly Advanced Medical Institute Pty Ltd) [2015] FCA 368 at [950];
(e)significant in this context means 'significant in magnitude', or 'sufficiently large to be important', 'being a meaning not too distant from substantial': Jetstar Airways Pty Ltd v Free at [104]-[105] per Cavanough J: Cf. Director of Consumer Affairs Victoria v AAPT Ltd [2006] VCAT 1493 at [32]-[33];
(f)the legislation proceeds on the assumption that some terms in consumer contracts, especially in standard form consumer contracts, may be inherently unfair, regardless of how comprehensively they might be drawn to the consumer's attention: Jetstar Airways Pty Ltd v Free at [115]; and
(g)in considering 'the contract as a whole', not each and every term of the contract is equally relevant, or necessarily relevant at all. The main requirement is to consider terms that might reasonably be seen as tending to counterbalance the term in question: Jetstar Airways Pty Ltd v Free at [128].
[4] Australian Competition and Consumer Commission v CLA Trading Pty Ltd [2016] FCA 377.
[5] Australian Competition and Consumer Commission v CLA Trading Pty Ltd [54] cited in OPR WA Pty Ltd v Marron [2016] WASC 395 [45] - [47] (Acting Master Strk).
12The principles were recently considered by Jackson J in Australian Competition and Consumer Commission v Smart Corporation Pty Ltd [No 3][6] in which his Honour said:[7]
As for what is reasonably necessary to protect the legitimate interests of the supplier, it is not appropriate to attempt to define 'legitimate interest' as it will depend on the nature of the particular business of the relevant supplier, the particular circumstances of the business, and the context of the contract as a whole. A legitimate interest may not be purely monetary and may not be confined to reimbursement of expenses directly occasioned by the customer's default. It may be intangible and unquantifiable. The court may take into account options that might be available to the supplier in terms of protecting its business interests, other than the impugned contract terms: see Australian Competition and Consumer Commission v Ashley & Martin Pty Ltd [2019] FCA 1436 (Ashley & Martin) at [48] - [49], [51], [53] (Banks-Smith J). Here, the ACCC relies on the presumption under s 24(4), which requires A4WD to prove that the impugned terms are reasonably necessary in order to protect its legitimate interests.
The third element in s 24(1) is detriment to the consumer. Lord Steyn said of a similar provision applicable in the United Kingdom that this element 'may not add much': Director General of Fair Trading v First National Bank plc [2002] 1 AC 481; [2002] 1 All ER 97; [2001] UKHL 52 at [36]. In my view that element simply requires that the application of or reliance on the unfair contract term will be disadvantageous to the consumer in some way. Under s 23(1)(c), the detriment may be financial or otherwise. It can include the imposition of liability in circumstances where the consumer would otherwise not be liable, or allowing the company to charge the consumer for damage for breach of contract where that breach did not cause or contribute to the damage: Ashley & Martin at [63]. Both of those are instances where the contract causes detriment because it imposes a disadvantage which would not be imposed in its absence.
As to transparency, s 24(2)(a) only requires the Court to consider transparency in relation to the particular term that is said to be unfair and only in relation to the matters concerning that term in s 24(1)(a) to (c): Chrisco at [43]. The meaning of 'transparency' in this context is explicit in s 24(3) (see [64] above). But it is not immediately apparent how the transparency of a term, or lack of it, can affect the question of whether the term is unfair.
The difficulty arises because of the nature of the evaluation required by Pt 2-3. It does not involve the exercise of a discretion. Section 23 provides that a term of a relevant consumer contract is void if it is unfair. The term will be unfair if the three elements in s 24(1) are satisfied. Whether that is so is an objective question requiring the application of the specified criteria to the facts. Section 24(2) describes it as a determination. No order of the court is required for s 24(2) to have effect. The court may make a declaration under s 250 which can have further remedial consequences (see below), and that involves a discretion. But that is a different thing to the determination contemplated by s 24(2).
That being so, it is hard to see how the transparency of the provision can affect the objective question of whether the three criteria in s 24(1) are satisfied. With one qualification, whether a term would cause a significant imbalance, is reasonably necessary to protect legitimate interests of a party, or would cause detriment to another party depends on what the impugned term means, that is, on its proper construction. Those matters depend on the effect of the term, on other relevant characteristics of the contract as a whole, and on the factual question of whether the term is reasonably necessary to protect legitimate interests. They do not depend on how the impugned term is presented. If, for example, it is buried in fine print, that may affect its legibility, but it will make no difference to the effect it will have on the parties if it is relied on. So, as Edelman J pointed out in Chrisco at [43], the Explanatory Memorandum to the Trade Practices Amendment (Australian Consumer Law) Bill (No 2) 2010 (Cth) on the introduction of what is now Pt 2-3 of the ACL says that if a term is not transparent it does not mean that it is unfair and if a term is transparent it does not mean that it is not unfair: see also Gilmour J's observation in CLA Trading at [54] (quoted above).
The one qualification emerges from the judgment of Banks-Smith J in Ashley & Martin. At [157] her Honour referred to obscurity in the way a particular provision was drafted. The obscurity meant that it was hard to know how the clause would apply in a particular situation: see [113] - [115]. Her Honour observed that this increased the degree of difficulty for consumers in identifying their contractual rights and thus added to the significant imbalance which the provision caused. This was still a question of the terms in which the provision was cast, not the way in which it was presented. I do not suggest that this is the only way that transparency (or lack thereof) can contribute to unfairness. It will depend on the circumstances of the case. But in the circumstances of this case, no other ways spring to mind.
As to having regard to the contract as a whole, an impugned term cannot be assessed in a vacuum which ignores the practical considerations that attach to the carrying out of contractual obligations: Ashley & Martin at [66].
[6] Australian Competition and Consumer Commission v Smart Corporation Pty Ltd [No 3] [2021] FCA 347; (2021) 153 ACSR 347.
[7] Australian Competition and Consumer Commission v Smart Corporation Pty Ltd [No 3] (355 - 367).
Injunctions
13Section 232 of the ACL empowers the court to grant injunctions provided certain conditions are satisfied (the core condition is, in effect, that the court is satisfied that there has been a contravention of the ACL or such a contravention is threatened). Section 233 of the ACL empowers the court to grant an injunction if all the parties to the proceedings consent, whether or not the court is satisfied as required by s 232(1). In this case the conditions specified in s 232(1) are satisfied.
14The provisions under s 232 and s 233 of the ACL are designed to ensure that the court 'be given the widest possible injunctive powers, devoid of traditional constraints, though the power must be exercised judicially and sensibly'.[8]
[8] ICI Australia Operations Pty Ltd v Trade Practices Commission (1992) 38 FCR 248, 256 (Lockhart J), 268 (French J); Foster v Australian Competition and Consumer Commission [2006] FCAFC 21; (2006) 149 FCR 135, 147 - 148 (Ryan, Finn & Allsop JJ).
Redress orders
15Section 239 of the ACL empowers the Court to make orders to redress the loss or damage suffered by a non-party. There is no dispute that the Court's power is enlivened and that orders should be made in favour of Mr Breen.
Declaratory relief
16Section 250 of the ACL is as follows:
250Declarations relating to consumer contracts and small business contracts
(1)The Court may declare that a term of a consumer contract is an unfair term, on application by:
(a)a party to the contract; or
(b)the regulator.
(2)The Court may declare that a term of a small business contract is an unfair term, on application by:
(a)a party to the contract, if the party was a business of the kind referred to in paragraph 23(4)(b) at the time the contract was entered into; or
(b)the regulator.
(3)Subsections (1) and (2) do not apply unless the contract is a standard form contract.
(4)Subsections (1) and (2) do not apply if Part 2‑3 does not apply to the contract.
(5)Subsections (1) and (2) do not limit any other power of the court to make declarations.
17In Australian Competition and Consumer Commission v Coles Supermarkets Australia Pty Ltd,[9] Gordon J referred to five principles that are to be applied when orders are sought by agreement:[10]
The applicable principles are well established. First, there is a well-recognised public interest in the settlement of cases under the Act: NW Frozen Foods Pty Ltd v Australian Competition & Consumer Commission (1996) 71 FCR 285 at 291. Second, the orders proposed by agreement of the parties must be not contrary to the public interest and at least consistent with it: Australian Competition & Consumer Commission v Real Estate Institute of Western Australia Inc (1999) 161 ALR 79 at [18].
Third, when deciding whether to make orders that are consented to by the parties, the Court must be satisfied that it has the power to make the orders proposed and that the orders are appropriate: Real Estate Institute at [17] and [20] and Australian Competition & Consumer Commission v Virgin Mobile Australia Pty Ltd (No 2) [2002] FCA 1548 at [1]. Parties cannot by consent confer power to make orders that the Court otherwise lacks the power to make: Thomson Australian Holdings Pty Ltd v Trade Practices Commission (1981) 148 CLR 150 at 163.
Fourth, once the Court is satisfied that orders are within power and appropriate, it should exercise a degree of restraint when scrutinising the proposed settlement terms, particularly where both parties are legally represented and able to understand and evaluate the desirability of the settlement: Australian Competition & Consumer Commission v Woolworths (South Australia) Pty Ltd (Trading as Mac's Liquor) [2003] FCA 530 at [21]; Australian Competition & Consumer Commission v Target Australia Pty Ltd [2001] FCA 1326 at [24]; Real Estate Institute at [20]-[21]; Australian Competition & Consumer Commission v Econovite Pty Ltd [2003] FCA 964 at [11] and [22] and Australian Competition & Consumer Commission v The Construction, Forestry, Mining and Energy Union [2007] FCA 1370 at [4].
Finally, in deciding whether agreed orders conform with legal principle, the Court is entitled to treat the consent of Coles as an admission of all facts necessary or appropriate to the granting of the relief sought against it: Thomson Australian Holdings at 164.
[9] Australian Competition and Consumer Commission v Coles Supermarkets Australia Pty Ltd [2014] FCA 1405.
[10] Australian Competition and Consumer Commission v Coles Supermarkets Australia Pty Ltd [70] - [73].
18Gordon J discussed the applicable requirements when a declaration is sought with consent of the parties:[11]
[11] Australian Competition and Consumer Commission v Coles Supermarkets Australia Pty Ltd [75] - [76].
Where a declaration is sought with the consent of the parties, the Court's discretion is not supplanted, but nor will the Court refuse to give effect to terms of settlement by refusing to make orders where they are within the Court's jurisdiction and are otherwise unobjectionable: see, for example, Econovite at [11].
However, before making declarations, three requirements should be satisfied:
(1)The question must be a real and not a hypothetical or theoretical one;
(2)The Commissioner must have a real interest in raising it; and
(3)There must be a proper contradictor:
Forster v Jododex at 437-8.
19In Commonwealth v Director, Fair Work Building Industry Inspectorate[12] the plurality of French CJ, Kiefel, Bell, Nettle and Gordon JJ noted the wide scope for the parties to agree upon an appropriate remedy in civil proceedings:[13]
In contrast, in civil proceedings there is generally very considerable scope for the parties to agree on the facts and upon consequences. There is also very considerable scope for them to agree upon the appropriate remedy and for the court to be persuaded that it is an appropriate remedy. Accordingly, settlements of civil proceedings are commonplace and orders by consent for the payment of damages and other relief are unremarkable. So are court-approved compromises of proceedings on behalf of infants and persons otherwise lacking capacity, court-approved custody and property settlements, court‑approved compromises in group proceedings and court-approved schemes of arrangement. More generally, it is entirely consistent with the nature of civil proceedings for a court to make orders by consent and to approve a compromise of proceedings on terms proposed by the parties, provided the court is persuaded that what is proposed is appropriate.
[12] Commonwealth v Director, Fair Work Building Industry Inspectorate [2015] HCA 46; (2015) 258 CLR 482.
[13] Commonwealth v Director, Fair Work Building Industry Inspectorate (507).
The impugned terms
20I set out below the terms the parties have agreed are unfair and why they are unfair. In doing so, I have adopted the Commissioner's submissions in respect of each term.
Impugned Holiday Accommodation Terms
Automatic Extension Term
Extensions to this agreement will be in four week increments should the holiday maker wish to extent their agreement. (Unless otherwise agreed to) If you are not extending your agreement we require you to advise us in writing or by email 21 days before your departure date. If you do not advise us in writing that you intend to leave the property this agreement will automatically extend for a further four week period.[14]
[14] Exhibit 1, pp 1, 5, 9, 13, 17, 21, 25, 29, 33, 37; exhibit 2, p 9.
21This term is unfair because:
(a)it contradicts an express statement of a 'departure date' on the front page of the document;
(b)it places the burden of advance written notice on the consumer which would be unexpected in the context of holiday accommodation;
(c)it automatically extends the contract for four weeks if that notice is not given;
(d)it would cause a consumer to be locked into a further four weeks of tenancy, even if they were merely late in giving the required notice; and
(e)the first sentence of the term also creates an impression that extensions are at the option of the consumer, an impression that is inconsistent with the terms when read as a whole.
Credit Card Preauthorisation Term
In the event our bond money is inadequate to cover any damage or unpaid rent we authorise you to debit our credit card for any monies due in excess of our bond.[15]
[15] Exhibit 1, pp 1, 5, 9, 13, 17, 21, 25, 29, 33, 37; exhibit 2, p 9.
22This term is unfair because:
(a)the agreement already provides for payment of rent in advance and a bond;
(b)there is no limit to the amount that may be charged;
(c)the agreement does not provide for notice to be given to the consumer or permission to be sought prior to charges being processed; and
(d)it does not provide consumers with the ability to verify or challenge the charges.
Forfeiture for Guests Term
In the event that you allow other persons to stay in your room/apartment/home on any occasion you will forfeit your bond monies and any rent paid in advance.[16]
[16] Exhibit 1, pp 1, 5, 9, 13, 17, 21, 25, 29, 33, 37; exhibit 2, p 9.
23This term is unfair because it provides for a penalty that is disproportionate to the consumer's conduct and any harm or loss caused by that conduct. This term falls within the category of terms referred to in s 25(c) of the ACL.
Cancellation Terms
Deposits, rent & bonds are non-refundable in the event you cancel your agreement with us.[17]
…
4.Cancellation and Refund Policy. Your Deposit/Rent/Bond is non-refundable [sic] if your reservation is cancelled after your reservation has been confirmed by us or if you choose to reduce your stay from the agreed time as stipulated as the finish date above. In the event you wish to reduce your stay and have somebody else take over your holiday agreement an administration fee equivalent to two weeks rent will be applicable. We ask you to choose carefully as we are unable to give refunds.[18]
[17] Exhibit 1, pp 1, 5, 9, 13, 17, 21, 25, 29, 33, 37; exhibit 2, p 9.
[18] Exhibit 1, pp 2, 6, 10, 14, 18, 22, 26, 30, 34, 38; exhibit 2, p 10.
24These terms are unfair because:
(a)they provide fixed remedies disproportionate to the range of conduct that could trigger their application;
(b)the fixed remedies exceed a reasonable pre-estimate of Starland's losses or costs arising from the cancellation or the reduction of the term of an agreement;
(c)they apply regardless of how far in advance the agreement is cancelled or reduced;
(d)they make no provision for circumstances in which a replacement tenant is found; and
(e)consumers would unlikely expect that all three amounts would be forfeited in the circumstances.
25These terms fall within the category of terms referred to in s 25(c) of the ACL.
Late Payment Termination Term
5.In the event that you do not pay the rental fee on or before the due date and within 24 hours of it becoming due your holiday agreement may be cancelled without notice and you will forfeit your bond and any rent paid in advance. Any fees paid in advance are deducted from the last week's fee and cannot be used to credit any fees [sic] due during the holiday period.[19]
[19] Exhibit 1, pp 2, 6, 10, 14, 18, 22, 26, 30, 34, 38; exhibit 2, p 10.
26This term is unfair because:
(a)the contract already provides for payment of rent in advance and a bond; and
(b)it provides for a penalty that is disproportionate to the harm or loss caused by the relevant conduct of the consumer. Loss of accommodation without notice is a harsh and an unreasonable consequence for late payment.
27The term falls within the categories of terms referred to in s 25(a), (b) and (c) of the ACL.
Ongoing Rent Term
5.***IMPORTANT….. YOU WILL BE CHARGED RENT UP UNTIL ALL KEYS HAVE BEEN RETURNED AND ANY DAMAGE CAUSED BY YOU HAS BEEN REPAIRED OR CLEANING COMPLETED*******[20]
…
21.In the event the keys are not returned on this date rent will be due and payable up until the date you return the keys.[21]
…
*** RENT WILL BE CHARGED TO YOU UP UNTIL ALL KEYS HAVE BEEN RETURNED AND ANY DAMAGE OR CLEANING HAS BEEN REPAIRED OR CLEANING COMPLETED*******[22]
[20] Exhibit 1, pp 2, 6, 10, 14, 18, 22, 26, 30, 34, 38; exhibit 2, p 10.
[21] Exhibit 1, pp 3, 7, 11, 15, 19, 23, 27, 31, 35, 39; exhibit 2, p 11.
[22] Exhibit 1, pp 4, 8, 12, 16, 20, 24, 28, 32, 36, 40; exhibit 2, p 12.
28These terms are unfair because they:
(a)provide for a penalty that is disproportionate to the harm or loss caused by the relevant act or omission of the consumer. The consumer could be financially penalised hundreds or thousands of dollars for simply losing their keys;
(b)create a liability to pay that is potentially indeterminate; and
(c)create a liability to pay rent until cleaning or repairs have been completed, the timing of which is in the hands of Starland.
29These terms fall within the category of terms referred to in s 25(c) of the ACL.
Forfeiture for Re-entry Term
20.Once you have checked out of the property you are not permitted to re enter the property under any circumstances. If you found [sic] at the property after vacating you will forfeit your bond money in full.[23]
[23] Exhibit 1, pp 3, 7, 11, 15, 19, 23, 27, 31, 35, 39; exhibit 2, p 11.
30This term is unfair because:
(a)it is a penalty that provides a disproportionate consequence for the harm or loss caused by the relevant conduct of the consumer; and
(b)the phrase 'under any circumstances' means the clause can be applied without reference to the reason or justification for re-entry.
31The term falls within the category of terms referred to in s 25(c) of the ACL.
Impugned Lodging Terms
Forfeiture for Vacation Without Notice Term
3.Performance Bond
…
c)In the event the Lodger vacates the premises without the correct notice the Lodger shall forfeit the full amount of the Performance Bond.[24]
[24] Exhibit 1, pp 43, 49, 55, 64, 67, 73.
32This term is unfair because:
(a)it is a penalty that provides a disproportionate consequence to the harm or loss caused by the conduct of the consumer;
(b)it makes no provision for circumstances in which a replacement tenant is found or the extent of any lack of notice; and
(c)the clause would apply even if a lodger provided slightly late notice.
33The term falls within the category of terms referred to in s 25(c) of the ACL.
Return of Bond Term
3.Performance Bond
…
d)The Performance Bond shall be returned to the Lodger less any amounts applicable to this agreement, provided that:
i.The Lodger has provided a physical forwarding address where they will reside on the termination of the Lodging License [sic].
ii.The Lodger has not caused any damage to the Lodger's room, the communal areas or to the Licensor's property.
iii.The Lodger has left his/her room and common areas in a clean and tidy condition, inclusive of the windows, carpets and furniture.
iv.On the day the Lodger vacates the premises, the Lodger shall return all keys and key tag that was provided to the Lodger.
v.The Lodger has paid all fees that are due and payable up to the expiry of the Lodging License [sic].
vi.The Lodger has paid any water, electricity, gas and other accounts which are due and payable for excess consumption.
vii.The Lodger acknowledges that in the event the above conditions are not adhered to NO amount of the Performance Bond will be returned until all conditions have been satisfied.
viii. The Performance Bond shall be returned in part as per this agreement approximately 12 weeks after the Lodger has vacated the premises.[25]
[25] Exhibit 1, pp 43, 49, 55, 64, 67, 73.
34This term is unfair because:
(a)it permits Starland to deduct amounts from the Performance Bond without notice of the basis of the deduction;
(b)it permits Starland to delay the return of the Performance Bond for 12 weeks;
(c)it requires a physical forwarding address, which may be an unreasonable condition for some consumers, particularly holidaymakers or itinerant persons;
(d)it does not provide for any mechanism to appeal, contest or access proper information of the changes or the basis for them;
(e)it makes Starland's liability to return any amount of the Performance Bond conditional on the satisfaction of all of the stated conditions, some of which may not be able to be satisfied retrospectively (conditions (ii), (iv)); and
(f)a consumer would not have their Performance Bond returned in a timely manner and potentially, may never have their Performance Bond returned.
Exclusion for Late Payment Term
4.Rental Fee
…
e)In the event that the Lodger fails to pay his/her fee for 4 consecutive days, the Licensor may refuse entry to the Lodger into the premises.[26]
[26] Exhibit 1, pp 43, 49, 55, 64, 67, 73.
35This term is unfair because:
(a)the contract already provides for payment of rent in advance and a bond;
(b)it provides a disproportionate consequence to the harm or loss caused by the relevant conduct of the consumer; and
(c)it does not provide for notice to the consumer.
36The term falls within the categories of terms referred to in s 25(a), (b) and (c) of the ACL.
Termination for Late Payment Term
4.Rental Fee
…
f)The Licensor may terminate the Lodging License [sic] with the Lodger, without notice, in the event that the Lodger fails to pay his/her fee for 4 consecutive days.[27]
[27] Exhibit 1, pp 43, 49, 55, 64, 67, 73.
37This term is unfair because:
(a)the contract already provides for payment of rent in advance and a bond;
(b)it provides a disproportionate consequence to the harm or loss caused by the relevant act or omission of the consumer; and
(c)it does not provide for notice to the consumer.
38The term falls within the categories of terms referred to in s 25(a), (b) and (c) of the ACL.
Discretionary Fee Increase Term
4.Rental Fee
…
h)Fee reviews are applicable to this license [sic] and in the event of a fee increase sixty days notice shall be given to the Lodger in writing advising the lodger of the reasons for the increase and the amount of the increase.[28]
[28] Exhibit 1, pp 43, 49, 55, 64, 67, 73.
39This term is unfair because:
(a)it provides Starland with the discretion to unilaterally increase rent during the initial fixed term of the contract, when the consumer has no right to terminate during that period; and
(b)a consumer may be locked into the contract for a higher fee than they had bargained for.
40The term falls within the category of terms referred to in s 25(d) of the ACL.
Ongoing Fees Term
16.Keys
…
After termination of the lodging license [sic], lodging fees and all costs of maintaining the property shall be the Lodger's responsibility until the keys are returned to the Licensor. This means you will be charged for each week or part thereof until the keys are returned.[29]
[29] Exhibit 1, pp 44, 50, 56, 61, 68, 75.
41This term is unfair because it:
(a)provides for a penalty that is disproportionate to the harm or loss caused by the relevant conduct of the consumer. A consumer could be financially penalised hundreds or thousands of dollars for simply losing their keys; and
(b)creates liability to pay that is potentially indeterminate.
42The term falls within the category of terms referred to in s 25(c) of the ACL.
Relief
43The following orders will be made:
44 IT IS DECLARED THAT:
1.The terms set out in annexure A to these orders which were included in contracts between the first defendant and its customers (Impugned Holiday Accommodation Terms) are unfair contract terms within the meaning of section 24 of the ACL and are void by operation of section 23 of the ACL.
2.The terms set out in annexure B to these orders which were included in contracts between the first defendant and its customers (Impugned Lodging Terms) are unfair contract terms within the meaning of section 24 of the ACL and are void by operation of section 23 of the ACL.
45 IT IS ORDERED THAT:
3.The first defendant is restrained from applying or relying on, or purporting to apply or rely on any Impugned Holiday Accommodation Terms or Impugned Lodging Terms or any term to the effect of those terms in a contract for holiday accommodation or lodging.
4.The second defendant is restrained from aiding, abetting, counselling, procuring or being in any way, directly or indirectly, knowingly concerned in or party to, any person applying or relying on, or purporting to apply or rely on any Impugned Holiday Accommodation Terms or Impugned Lodging Terms or any term to the effect of those terms in a contract for holiday accommodation or lodging.
5.The first defendant refund to David Breen $1,500.
6.The defendants pay the plaintiff's costs of the proceedings, fixed at $5,000.
ANNEXURE A
| IMPUGNED HOLIDAY ACCOMMODATION TERMS | |
| 1. | Automatic Extension Term (front page) Extensions to this agreement will be in four week increments should the holiday maker wish to extent their agreement. (Unless otherwise agreed to) If you are not extending your agreement we require you to advise us in writing or by email 21 days before your departure date. If you do not advise us in writing that you intend to leave the property this agreement will automatically extend for a further four week period. |
| 2. | Credit Card Preauthorisation Term (front page) In the event our bond money is inadequate to cover any damage or unpaid rent we authorise you to debit our credit card for any monies due in excess of our bond. |
| 3. | Forfeiture for Guests Term (front page) In the event that you allow other persons to stay in your room/apartment/home on any occasion you will forfeit your bond monies and any rent paid in advance. |
| 4. | Cancellation Terms (front page and Clause 4, page 2) Deposits, rent & bonds are non-refundable in the event you cancel your agreement with us. AND Cancellation and Refund Policy. Your Deposit/Rent/Bond is non-refundable [sic] if your reservation is cancelled after your reservation has been confirmed by us or if you choose to reduce your stay from the agreed time as stipulated as the finish date above. In the event you wish to reduce your stay and have somebody else take over your holiday agreement an administration fee equivalent to two weeks rent will be applicable. We ask you to choose carefully as we are unable to give refunds. |
| 5. | Late Payment Termination Term (Clause 5, page 2) In the event that you do not pay the rental fee on or before the due date and within 24 hours of it becoming due your holiday agreement may be cancelled without notice and you will forfeit your bond and any rent paid in advance. Any fees paid in advance are deducted from the last week’s fee and cannot be used to credit any fees due during the holiday period. |
| 6. | Ongoing Rent Terms (Clause 5, Clause 21, page 4) ***IMPORTANT….. YOU WILL BE CHARGED RENT UP UNTIL ALL KEYS HAVE BEEN RETURNED AND ANY DAMAGE CAUSED BY YOU HAS BEEN REPAIRED OR CLEANING COMPLETED******* AND In the event the keys are not returned on this date rent will be due and payable up until the date you return the keys. AND *** RENT WILL BE CHARGED TO YOU UP UNTIL ALL KEYS HAVE BEEN RETURNED AND ANY DAMAGE OR CLEANING HAS BEEN REPAIRED OR CLEANING COMPLETED******* |
| 7. | Forfeiture for Re-entry Term (Clause 20) Once you have checked out of the property you are not permitted to re enter the property under any circumstances. If you found [sic] at the property after vacating you will forfeit your bond money in full. |
ANNEXURE B
| IMPUGNED LODGING TERMS | |
| 1. | Forfeiture for Vacation without Notice Term (Clause 3(c)) In the event the Lodger vacates the premises without the correct notice the Lodger shall forfeit the full amount of the Performance Bond. |
| 2. | Return of Bond Term (Clause 3(d)) The Performance Bond shall be returned to the Lodger less any amounts applicable to this agreement, provided that: (i) The Lodger has provided a physical forwarding address where they will reside on the termination of the Lodging License. (ii) The Lodger has not caused any damage to the Lodger’s room, the communal areas or to the Licensor’s property. (iii) The Lodger has left his/her room and common areas in a clean and tidy condition, inclusive of the windows, carpets and furniture. (iv) On the day the Lodger vacates the premises, the Lodger shall return all keys and key tag that was provided to the Lodger. (v) The Lodger has paid all fees that are due and payable up to the expiry of the Lodging License. (vi) The Lodger has paid any water, electricity, gas and other accounts which are due and payable for excess consumption. (vii) The Lodger acknowledges that in the event the above conditions are not adhered to NO amount of the Performance Bond will be returned until all conditions have been satisfied. (viii) The Performance Bond shall be returned in part as per this agreement approximately 12 weeks after the Lodger has vacated the premises. |
| 3. | Exclusion for Late Payment Term (Clause 4(e)) In the event that the Lodger fails to pay his/her fee for 4 consecutive days, the Licensor may refuse entry to the Lodger into the premises. |
| 4. | Termination for Late Payment Term (Clause 4(f)) The Licensor may terminate the Lodging License with the Lodger, without notice, in the event that the Lodger fails to pay his/her fee for 4 consecutive days. |
| 5. | Discretionary Fee Increase Term (Clause 4(h)) Fee reviews are applicable to this license and in the event of a fee increase sixty days notice shall be given to the Lodger in writing advising the lodger of the reasons for the increase and the amount of the increase. |
| 6. | Ongoing Fees Term (Clause 16) After termination of the lodging license, lodging fees and all costs of maintaining the property shall be the lodger’s responsibility until the keys are returned to the Licensor. This means you will be charged for each week or part thereof until the keys are returned. |
I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.
OK
Court Officer
17 MARCH 2022
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