Director of Consumer Affairs Victoria v Donald (No 2)
[2016] VSC 683
•15 November 2016
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMERCIAL COURT
S CI 2016 01638
| DIRECTOR OF CONSUMER AFFAIRS VICTORIA | Plaintiff |
| v | |
| DAVID JAMES DONALD | Defendant |
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JUDGE: | Robson J |
WHERE HELD: | Melbourne |
DATE OF HEARING: | 19 August 2016 |
DATE OF JUDGMENT: | 15 November 2016 |
CASE MAY BE CITED AS: | Director of Consumer Affairs Victoria v Donald (No 2) |
MEDIUM NEUTRAL CITATION: | [2016] VSC 683 |
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CONSUMER LAW – Defendant engaged in unsolicited consumer agreements by way of door-to-door sales of cleaning services of carpets, drapes and furniture – Defendant failed to comply with requirements of the Australian Consumer Law (Vic) (ACL (Vic)) applicable to unsolicited consumer agreements.
CONSUMER LAW – Application for declarations of breach of the ACL (Vic) pursuant to Part 2.2 and s 216 of the Australian Consumer Law & Fair Trading Act 2012 (Vic) (ACLAFTA) or s 36 of the Supreme Court Act 1986 (Vic) – Application for consequential relief reserved.
CIVIL PROCEDURE – Application for summary judgment under s 63 of the Civil Procedure Act 2010 (Vic).
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Ms Andrea Mapp (solicitor) | Consumer Affairs Victoria |
| For the Defendant | No appearance |
HIS HONOUR:
Introduction
Before me is an originating motion dated 4 May 2016, brought by the Director of Consumer Affairs Victoria (the Director) seeking:
(a)a declaration pursuant to s 36 of the Supreme Court Act 1986 (SCA) or s 216(2)(h) of the Australian Consumer Law and Fair Trading Act 2012 (Vic) (ACLAFTA) against the defendant, Mr David James Donald (Mr Donald) for contraventions of the Australian Consumer Law (Vic) (ACL (Vic))[1] (specifically ss 74(b), 74(c), 76(a)(i), 76(a)(ii), 76(b), 79(b)(i), 79(b)(ii), 79(c)(i), 79(e), 86(1)(a), and 86(1)(c));
(b)final relief in the form of:
i.an order for a cease trading injunction pursuant to s 232(5) restraining Mr Donald from carrying on business under unsolicited consumer agreements for a period of five years, or alternatively an order that Mr Donald be restrained from entering unsolicited consumer agreements unless certain requirements are complied with, pursuant to s 232(1) of the ACL (Vic);
ii.an order pursuant to s 232(6)(a) of the ACL (Vic) that Mr Donald pay to the Director a refund on behalf of David Edward Plant and Barbara Anne Plant, Elizabeth Rhoda Williams, Annie Crook, and Dorothy Rayner (collectively referred to as the consumers);[2]
iii.an order pursuant to s 237 of the ACL (Vic) that Mr Donald pay damages, including aggravated damages, to the Director, on behalf of the consumers for anxiety and distress occasioned by the alleged contraventions of ss 74, 76, 79 and 86 of the ACL (Vic);
iv.an order pursuant to s 224 of the ACL (Vic) that Mr Donald pay to the State of Victoria such pecuniary penalties as the court determines appropriate for each contravention, if the court so finds, of ss 74, 76, 79 and 86 of the ACL (Vic);
[1]Schedule 2 of the Competition and Consumer Act2010 (Cth) and the regulations under s 139G of that act, insofar as it applies to Victoria, is referred to as the Australian Consumer Law (Victoria) (ACL (Vic)) (see s 8(1)(b) of the ACLAFTA). Insofar as the ACL (Vic) applies in Victoria, under Part 2.2 of the ACLAFTA, it forms part of the ACLAFTA. The legislative regime is discussed below at [10].
[2]See Schedule B of the plaintiff’s originating motion dated 4 May 2016.
I also have before me an application for:
(a)an order pursuant to s 63 of the Civil Procedure Act 2010 (Vic) (CPA) that there be summary judgment for the plaintiff for alleged contravention of the ACL (Vic) (as applied by the ACLAFTA) in relation to the unsolicited provision of various carpet and cleaning related services (the services) between January 2016 and March 2016 by Mr Donald, seeking the relief set out above; or alternatively
(b)directions as to the management of the trial pursuant to s 47 of the CPA; and
(c)an order that Mr David Plant, Mrs Barbara Plant and Mrs Elizabeth Williams be able to provide evidence via audio visual link pursuant to s 43(E)(1) of the Evidence (Miscellaneous Provisions) Act 1958 (Vic).
For the reasons below, I find that the allegations that Mr Donald has breached the ACL (Vic) are made out and the Director is entitled to the declarations sought. A decision as to appropriate relief is reserved until Mr Donald is given the opportunity to be heard.
As I accept the application for summary judgment, it is not necessary for me to deal with the applications for directions or orders for production of evidence.
Background
Mr Donald engaged in the unsolicited provision of various carpet and cleaning related services between January 2016 and March 2016. I adopt the facts set out in the affidavit evidence of witnesses for the Director and have set the facts out below.
Previously to this proceeding, on 21 October 2015, separate proceedings were issued by the Director against Mr Donald.[3] On 8 December 2015, Associate Justice Daly found that Mr Donald had provided cleaning services and entered into ‘unsolicited consumer agreements’, as defined in the ACL (Vic),[4] in breach of the ACL (Vic). Mr Donald consented to orders restraining him for a period of five years from entering into consumer agreements without following a prescribed procedure and without issuing documents with prescribed information. Mr Donald was also ordered to pay costs, damages and make refunds to the relevant consumers.
[3]Director of Consumer Affairs v David James Donald (S CI 2015 05475, Associate Justice Daly, 21 October 2015).
[4]Section 69(1) of the Australian Consumer Law (Vic).
On 4 May 2016, the Director initiated the current proceedings by originating motion, seeking the relief as outlined above in paragraph 1.
On 12 May 2016, interim orders were made prohibiting Mr Donald from entering into any ‘unsolicited consumer agreements’ until hearing and final determination of the proceeding under s 234 of the ACL (Vic), which allows an interim injunction to be made pending the determination of an application under s 232 of the ACL (Vic).
Relevant legislation: breach of the ACL (Vic)
The Director brings this application as a public officer in support of the purposes of the Australian Consumer Law and Fair Trading Act 2012 (Vic) (ACLAFTA), in particular, ‘to protect consumers.’[5]
[5]Section 1(b) of the ACLAFTA.
Schedule 2 of the Competition and Consumer Act 2010 (Cth) (CCA), the Australian Consumer Law, is applied as a law of the Commonwealth within limits prescribed by the CCA and as a law of each State and Territory by reason of the relevant legislation applying the Australian Consumer Law.
In Victoria, the Australian Consumer Law is applied by the ACLATFA. Insofar as the Australian Consumer Law applies to Victoria, it is referred to as the Australian Consumer Law (Vic) (ACL (Vic)).[6]
[6]See above n 1.
The Director alleges that Mr Donald negotiated unsolicited consumer agreements with the consumers, in a manner that contravened ss 74(b), 74(c), 76(a)(i), 76(a)(ii), 76(b), 79(b)(i), 79(b)(ii), 79(c)(i), 79(e), 86(1)(a), and 86(1)(c) of the ALC (Vic).
Section 69(1) of the ACL (Vic) defines an ‘unsolicited consumer agreement’;
(1) An agreement is an unsolicited consumer agreement if:
(a)it is for the supply, in trade or commerce, of goods or services to a consumer; and
(b)it is made as a result of negotiations between a dealer and the consumer:
(i)in each other’s presence at a place other than the business or trade premises of the supplier of the goods or services; or
(ii)by telephone;
whether or not they are the only negotiations that precede the making of the agreement; and
(c)the consumer did not invite the dealer to come to that place, or to make a telephone call, for the purposes of entering into negotiations relating to the supply of those goods or services (whether or not the consumer made such an invitation in relation to a different supply); and
(d)the total price paid or payable by the consumer under the agreement:
(i)is not ascertainable at the time the agreement is made; or
(ii)if it is ascertainable at that time—is more than $100 or such other amount prescribed by the regulations.
…
Relevantly, s 70(1) of the ACL (Vic) sets out the circumstances wherein agreements are presumed to be unsolicited consumer agreements;
(1)In a proceeding relating to a contravention or possible contravention of this Division (other than a criminal proceeding), an agreement is presumed to be an unsolicited consumer agreement if:
(a)a party to the proceeding alleges that the agreement is an unsolicited consumer agreement; and
(b)no other party to the proceeding proves that the agreement is not an unsolicited consumer agreement.
…
If an agreement is an unsolicited consumer agreement, the ACL (Vic) sets out certain requirements that a dealer must comply with when entering into such agreements. The Director alleges that Mr Donald, as a dealer, failed to comply with these requirements. The relevant provisions are set out below.
Section 74 requires a dealer to disclose their purpose of visit and their identity;
A dealer who calls on a person for the purpose of negotiating an unsolicited consumer agreement, or for an incidental or related purpose, must, as soon as practicable and in any event before starting to negotiate:
(a)clearly advise the person that the dealer’s purpose is to seek the person’s agreement to a supply of the goods or services concerned; and
(b)clearly advise the person that the dealer is obliged to leave the premises immediately on request; and
(c)provide to the person such information relating to the dealer’s identity as is prescribed by the regulations.
Note: A pecuniary penalty may be imposed for a contravention of this section.
Section 76 requires a dealer to inform the consumer of certain rights that they have under the ALC (Vic) in relation to the negotiation of an unsolicited consumer agreement;
A dealer must not make an unsolicited consumer agreement with a person unless:
(a)before the agreement is made, the person is given information as to the following:
(i)the person’s right to terminate the agreement during the termination period;
(ii)the way in which the person may exercise that right;
(iii)such other matters as are prescribed by the regulations; and
(b)if the agreement is made in the presence of both the dealer and the person—the person is given the information in writing; and
(c)if the agreement is made by telephone—the person is given the information by telephone, and is subsequently given the information in writing; and
(d)the form in which, and the way in which, the person is given the information complies with any other requirements prescribed by the regulations.
Note: A pecuniary penalty may be imposed for a contravention of this section.
Further, s 79 sets out requirements for all unsolicited consumer agreements as follows;
The supplier under an unsolicited consumer agreement must ensure that the agreement, or (if the agreement was negotiated by telephone) the agreement document, complies with the following requirements:
(a) it must set out in full all the terms of the agreement, including:
(i)the total consideration to be paid or provided by the consumer under the agreement or, if the total consideration is not ascertainable at the time the agreement is made, the way in which it is to be calculated; and
(ii) any postal or delivery charges to be paid by the consumer;
(b) its front page must include a notice that:
(i)conspicuously and prominently informs the consumer of the consumer’s right to terminate the agreement; and
(ii)conspicuously and prominently sets out any other information prescribed by the regulations; and
(iii)complies with any other requirements prescribed by the regulations;
(c)it must be accompanied by a notice that:
(i) may be used by the consumer to terminate the agreement; and
(ii) complies with any requirements prescribed by the regulations;
(d) it must conspicuously and prominently set out in full:
(i) the supplier’s name; and
(ii) if the supplier has an ABN—the supplier’s ABN; and
(iii)if the supplier does not have an ABN but has an ACN—the supplier’s ACN; and
(iv)the supplier’s business address (not being a post box) or, if the supplier does not have a business address, the supplier’s residential address; and
(v)if the supplier has an email address—the supplier’s email address; and
(vi)if the supplier has a fax number—the supplier’s fax number;
(e)it must be printed clearly or typewritten (apart from any amendments to the printed or typewritten form, which may be handwritten);
(f) it must be transparent.
Note: A pecuniary penalty may be imposed for a contravention of this section.
Section 86 of the ACL (Vic) sets out a prohibition on supplies et cetera for 10 business days:
(1) The supplier under an unsolicited consumer agreement must not:
(a)supply to the consumer under the agreement the goods or services to be supplied under the agreement; or
(b)accept any payment, or any other consideration, in connection with those goods or services; or
(c)require any payment, or any other consideration, in connection with those goods or services;
during the period of 10 business days starting:
(d)if the agreement was not negotiated by telephone—at the start of the first business day after the day on which the agreement was made; or
(e)if the agreement was negotiated by telephone—at the start of the first business day after the day on which the consumer was given the agreement document relating to the agreement.
Note: A pecuniary penalty may be imposed for a contravention of this subsection.
(2)If the supplier supplies goods to the consumer in contravention of this section, the consumer has the same rights in relation to the goods as if the goods were unsolicited goods.
Note: Section 41 deals with unsolicited goods.
The Director’s submissions
The Director submits that as Mr Donald, in carrying out his business, calls on consumers at their homes for the purpose of entering into negotiations for the supply of services, Mr Donald is, and at all relevant times was, a ‘dealer’[7] for the purposes of the unsolicited consumer agreements provisions of the ACL (Vic).[8]
[7]Defined at s 71 of the ACL (Vic).
[8]Schedule 2, Chapter 3, Part 3–2 Div 2, ss 69–95 of the Competition and Consumer Act 2010 (as applied by Part 2.2 of the Australian Consumer Law and Fair Trading Act (2012) (Vic).
The Director submits that Mr Donald entered into unsolicited consumer agreements with the consumers because:
(a)the agreements were negotiated[9] in the consumers’ homes (on the dates identified in Schedule B of the originating motion and outlined below in the affidavit evidence), and not at Mr Donald’s business or trade premises (being 1/8 Mason Street, Reservoir);
(b)they involved the provision of services;[10]
(c)the consumers did not invite Mr Donald to come to their homes;
(d)in each consumer agreement, the total price paid for the services was more than $100;
(e)the supply of the services by the defendant was in trade or commerce;[11] and
(f)each of the consumers is a ‘consumer’[12] for the purposes of the unsolicited consumer agreements provisions of the ACL (Vic), because the services were acquired from Mr Donald for a sum less than $40,000 and the services were of a kind for personal, domestic, or household use, or consumption.
[9]Negotiated is defined at s 72 of the ACL (Vic).
[10]Services is defined at s 2 of the ACL (Vic). The relevant services are identified in Schedule A to the originating motion.
[11]Trade or commerce is defined at s 2 of the ACL (Vic).
[12]Consumers is defined at s 3 of the ACL (Vic).
Each of the consumers has sworn or affirmed an affidavit, filed in these proceedings, in which they depose to the alleged contraventions of some or all of the relevant provisions of the ACL (Vic) (set out above).
Affidavits
The Director relied on the evidence of the consumers as set out in the following affidavits to establish that Mr Donald breached the ACLAFTA (and the ACL (Vic) relevant to unsolicited consumer agreements).
Mr David Edward Plant
Mr David Edward Plant (Mr Plant) is a 74 year old retired stonemason who lives at home with his wife Barbara Anne Plant. Mr Plant suffers from chronic lung disease and requires constant oxygen and assistance moving around. In his affidavit sworn 16 March 2016, Mr Plant deposes that a man dressed in khaki shorts and a shirt came to his front door at or around 11.00 am on 26 February 2016. Mr Plant states he was surprised by this visit as he had not arranged for, or expected anyone, to visit.
Mr Plant says that there is a sign fixed to the left hand side of his front door that says: ‘No Door Knockers Thank You.’
Mr Plant says that when he greeted this man, the man said: ‘Open the door, I can’t see your face.’ Mr Plant then opened the door and the man outside introduced himself as ‘David’ and stated that he was ‘in the area cleaning carpets, curtains and lounge suites.’
Mr Plant says that, without invitation, ‘David’ proceeded to make his way past Mr Plant and into the lounge room. At this time Mr Plant’s wife, Barbara Anne Plant came inside the house. ‘David’ then offered to clean the carpets, remove a ‘bubble’ from the carpet, and vacuum the drapes for $525. He alternatively offered to replace the carpet at a cost of $4,000. Mr Plant says that he and Barbara Anne Plant rejected ‘David’s’ offer of replacing the carpet, but agreed to cleaning being carried out.
Mr Plant says that following this conversation, ‘David’ went to the front door and signalled to a white van. A man of Asian appearance introduced as ‘Jack’ came into the house and began moving furniture and cleaning the carpet. The men spent around two to three hours cleaning.
After cleaning the carpets, ‘David’ asked Mr Plant to write his name and address on a tax invoice for $500. ‘David’ then insisted that this be paid in cash, which Mr Plant paid at the time. Mr Plant recognised this invoice as one shown to him by Consumer Affairs Victoria.
Mr Plant deposed that neither of the men:
(a)gave their full names;
(b)told him or gave him a document informing him that they were obliged to leave his home immediately if he requested them to do so;
(c)gave him a document informing him that he had a right to terminate the agreement he had made to have them clean his carpet and drapes, or explained the way in which he could exercise his right to terminate;
(d)gave any documents relating to any agreement for the men to clean the carpet and the drapes, aside from the tax invoice given after payment;
(e)told him that they were not to supply any services for 10 business days after the agreement to provide cleaning services; and
(f)told him that he had a right to a 10-day ‘cooling off’ period after agreeing to have his carpet and drapes cleaned.
Mrs Barbara Anne Plant
Mrs Barbara Anne Plant (Mrs Plant) is 74 years old and lives in Kyneton with her husband Mr Plant. In her affidavit sworn 16 March 2016, Mrs Plant deposes that at around 11.00 am on Friday 26 February 2016, Mrs Plant entered her house and found her husband talking to a stranger who identified himself only as ‘David’. Mrs Plant says that this visit was completely unexpected and that she had never met ‘David’ or his assistant, also present (introduced only as ‘Jack’), before.
Mrs Plant says that after she entered her home ‘David’ reached an agreement with Mr Plant to clean the carpets and blinds and remove a ‘bubble’ from the carpet. ‘David’ apparently insisted on cash payment. ‘David’ and ‘Jack’ then spent around two to three hours cleaning the carpet and curtains.
Mrs Plant deposes that neither of the two men:
(a)gave their full names;
(b)told her or gave her a document informing her that they were obliged to leave her home immediately if she requested them to do so;
(c)gave her a document informing her that she had a right to terminate the agreement she had made to have them clean her drapes, or explained the way in which she could exercise her right to terminate;
(d)gave any documents relating to any agreement for the men to clean the drapes, aside from the tax invoice given after payment;
(e)told her that they were not to supply any services for 10 business days after the agreement to provide cleaning services; or
(f)told her that she had a right to a 10-day ‘cooling off’ period after agreeing to have her drapes cleaned.
The only document that the either Mr or Mrs Plant received was a tax invoice from ‘Donald Cleaning Services’ for an amount of $500 dated 26 February 2016, which, as Mr Plant says in his affidavit above, he paid in cash on the same day.
Mrs Elizabeth Rhoda Williams
Mrs Elizabeth Rhoda Williams (Mrs Williams) is 89 years old and is a retired telephonist, who lives alone at her house in Kangaroo Flat, Victoria. Her only income is a part pension and some superannuation payments.
In Mrs Williams’ affidavit sworn 7 April 2016, she deposes that at around 10.00 am on 12 February 2016 someone repeatedly rang her front doorbell. Mrs Williams states that she was not expecting anyone to visit. When she went to the door, there was a man wearing khaki shorts and a shirt, to whom she asked if anything was wrong.
Mrs Williams says that this man then opened the wire door and proceeded uninvited, past Mrs Williams, into her lounge room. Once inside, the man introduced himself as ‘Don Donald’ and stated that he was ‘in the neighbourhood cleaning carpets.’
Mrs Williams says that ‘Don Donald’ asserted that her carpets did in fact need cleaning. Mrs Williams initially replied with words to the effect of ‘I’m not ready to have it done, I’ve had a lot of expenses lately. I can’t afford to have it done at the moment.’
Mrs Williams says that ‘Don Donald’ ignored this refusal and said ‘you can afford it. You get a pension don’t you? You have some money somewhere don’t you?’ Mrs Williams says that he later said, ‘I’m going to do it now. You have cash to pay me?’
Mrs Williams says that after asserting that he would ‘do it now’, ‘Don Donald’ went to a white van outside the house and returned with a younger man he introduced as ‘Johnny’. ‘Johnny’ proceeded to clean the carpets.
Mrs Williams submits that ‘Don Donald’ was rude, loud and pushy and that she was frightened by him and concerned for her safety. She did not believe she could get ‘Don Donald’ to leave her home.
Mrs Williams says that ‘Don Donald’ insisted that Mrs Williams make him coffee and bring him biscuits.
Mrs Williams says that neither of the men gave her any documents or details of what they were doing. While the carpet was being cleaned ‘Don Donald’ told Mrs Williams that the cleaning was going to cost $550 and that he wanted to be paid in cash.
Mrs Williams says that she told ‘Don Donald’ that she did not have that much cash and that ‘Don Donald’ agreed to be paid by cheque, provided it was payable to the bearer in cash.
Mrs Williams says that ‘Don Donald’ produced a tax invoice for $550 with ‘Donald Cleaning Services’ written across the top. He told Mrs Williams to write her name and address on the tax invoice.
Mrs Williams was shown a copy of an invoice by the Director of Consumer Affairs that she maintains was this invoice.
After Mrs Williams had filled out the invoice, she says that ‘Don Donald’ stated that the cost was now $600 due to the cleaning of an extra room. Mrs Williams says that she was unhappy with this but felt intimidated and that she could not refuse ‘Don Donald’.
Mrs Williams then wrote out a cheque for $600 to be paid in cash to the bearer and informed ‘Don Donald’ of the directions to her local bank. The copy of the corresponding cheque stub was tendered into evidence.
Mrs Williams states that after the men left, the carpet stayed wet for several days and still appeared to be dirty. She also noted that furniture that had been moved back while the carpet was still wet had caused brown stains on the carpet and that the drapes in her bedrooms had not been cleaned.
Mrs Williams deposed that she feared the men would come back to her house and has since had trouble sleeping. Mrs Williams says that she now chooses to sleep in her lounge room to ‘avoid feeling trapped.’
Mrs Williams says that because she was afraid of the men returning she reported the incident to the Bendigo Police Station on 13 February 2016 and thereafter made a full written complaint on 10 March 2016.
Mrs Williams states that she had never met either of the men who came to her house on the day of 12 February 2016 and that neither of the men:
(a)identified themselves, beyond giving the names ‘Don Donald’ and ‘Johnny’;
(b)either told her, or gave her a document, informing her that they were obliged to leave her home immediately if she requested they do so;
(c)gave her a document informing her that she had a right to terminate the agreement she had made to have them clean her carpets, or explained the way in which she could exercise her right to terminate;
(d)gave any documents relating to any agreement for the men to clean the carpet, aside from the tax invoice;
(e)told her that they were not to supply any services for 10 business days after the agreement to provide cleaning services; or
(f)told her that she had a right to a 10-day ‘cooling off’ period after agreeing to have her carpets cleaned.
Mrs Dorothy Rayner
Mrs Dorothy Rayner (Mrs Rayner) is 86 years old and is a retired cleaner who lives with her husband Alan Rayner in Altona, Victoria. Her sole income is the age pension.
In her affidavit sworn 12 March 2016, Mrs Rayner claims that she and her husband (the Rayners) received an unexpected visit on the morning of 12 March 2016 from two men. One of the men claimed to have cleaned the carpets at the Rayners’ house seven years previous and asked if they could come inside to look at the carpets to see if they needed cleaning again. The Rayners allowed one of the men into the house.
Mrs Rayner said that this man insisted that the carpets did need cleaning, and called his associate into the house who then commenced cleaning. They did not give their names or discuss how much the cleaning was going to cost.
Mrs Rayner deposes that neither of the men:
(a)gave their names;
(b)told her, or gave her a document, informing her that they were obliged to leave her home immediately if she requested them to do so;
(c)gave her a document informing her that she had a right to terminate the agreement she had made to have them clean her carpets, or explained the way in which she could exercise her right to terminate;
(d)gave any documents relating to any agreement for the men to clean the carpet, aside from the tax invoice given after payment;
(e)told her that they were not to supply any services for 10 business days after the agreement to provide cleaning services; or
(f)told her that she had a right to a 10 day ‘cooling off’ period after agreeing to have her carpets cleaned.
Mrs Rayner paid one of the men $450 in cash and signed a tax invoice.
Mrs Rayner said that she recognised her handwriting and signature on a copy of tax invoice from ‘Donald Cleaning Services’ for $450 dated 19 April 2016, shown to her by Consumer Affairs Victoria inspector, Hayden Bellis, on 19 April 2016.
Mrs Annie Crook
Mrs Annie Crook (Mrs Crook) is 87 years old and lives in Altona, Victoria, with her husband Kenneth Crook. In her affidavit, sworn 19 April 2016, Mrs Crook stated that on 15 March 2016 two men came to her house uninvited and enquired as to whether she wanted any carpet, furniture or drapes cleaned.
Mrs Crook says that neither of the men gave their names. Mrs Crook said that the men said that they had done cleaning for her previously. Mrs Crook allowed the two men into her home to clean some drapes.
When the cleaning was finished, Mrs Crook paid the men $400 in cash and was given a tax invoice. This tax invoice, a copy of which was tendered into evidence, had ‘Donald Cleaning Services’ written across the top.
Mrs Crook deposes that neither of these men:
(a)told her or gave her a document informing her that they were obliged to leave her home immediately if she requested them to do so;
(b)gave her a document informing her that she had a right to terminate the agreement she had made to have them clean her drapes, or explained the way in which she could exercise her right to terminate;
(c)gave any documents relating to any agreement for the men to clean the drapes aside from the tax invoice given after payment;
(d)told her that they were not to supply any services for 10 business days after the agreement to provide cleaning services; or
(e)told her that she had a right to a 10-day ‘cooling off’ period after agreeing to have her drapes cleaned.
Each consumer says that a document, described as a tax invoice, was given to the consumers when the services were delivered. The corresponding sellers invoices were found in Mr Donald’s home and car in searches conducted under s 126 of the ACLAFTA.
The Director submits that as Mr Donald had in his possession copies of the tax invoices provided to the consumers, it was Mr Donald who entered into the unsolicited consumer contracts with the consumers contrary to the requirements of the ACL (Vic) as identified above.
Summary judgment
The Director has sought declarations that the above conduct breached the ACL (Vic); final relief for the alleged breaches; and, in the absence of a defence being filed by Mr Donald, summary judgment of the applications for declarations and final relief under s 63 of the CPA.
Section 63 of the CPA allows the court, subject to s 64, to give summary judgment in any civil proceeding if satisfied that a claim, a defence or a counterclaim, or part of the claim, defence or counterclaim, as the case requires, has no real prospect of success.
Section 63 provides for summary judgment if no real prospect of success as states as follows;
(1)Subject to section 64, a court may give summary judgment in any civil proceeding if satisfied that a claim, a defence or a counterclaim or part of the claim, defence or counterclaim, as the case requires, has no real prospect of success.
(2)A court may give summary judgment in any civil proceeding under subsection (1)—
(a) on the application of a plaintiff in a civil proceeding;
(b) on the application of a defendant in a civil proceeding;
(c)on the court’s own motion, if satisfied that it is desirable to summarily dispose of the civil proceeding.
Section 64 provides that the court may allow a matter to proceed to trial;
Despite anything to the contrary in this Part or any rules of court, a court may order that a civil proceeding proceed to trial if the court is satisfied that, despite there being no real prospect of success the civil proceeding should not be disposed of summarily because—
(a) it is not in the interests of justice to do so; or
(b)the dispute is of such a nature that only a full hearing on the merits is appropriate.
The Director relies on the below authorities in his application for summary judgment.
The application of s 63 of the CPA was considered by Warren CJ and Nettle JA in Lysaght Building Solutions Pty Ltd (t/as Highline Commercial Construction) v Blanalko Pty Ltd.[13] Their honours said that:[14]
Upon the present state of authority:
(a)the test for summary judgment under s 63 of the Civil Procedure Act 2010 is whether the respondent to the application for summary judgment has a ‘real’ as opposed to a ‘fanciful’ chance of success;
(b)the test is to be applied by reference to its own language and without paraphrase or comparison with the ‘hopeless’ or ‘bound to fail test’ essayed in General Steel;
(c)it should be understood, however, that the test is to some degree a more liberal test than the ‘hopeless’ or ‘bound to fail’ test essayed in General Steel and, therefore, permits of the possibility that there might be cases, yet to be identified, in which it appears that, although the respondent’s case is not hopeless or bound to fail, it does not have a real prospect of success;
(d)at the same time, it must be borne in mind that the power to terminate proceedings summarily should be exercised with caution and thus should not be exercised unless it is clear that there is no real question to be tried; and that is so regardless of whether the application for summary judgment is made on the basis that the pleadings fail to disclose a reasonable cause of action (and the defect cannot be cured by amendment) or on the basis that the action is frivolous or vexatious or an abuse of process or where the application is supported by evidence.
[13][2013] VSCA 158 (‘Lysaght v Blanalko’).
[14]Lysaght v Blanalko, [35].
In Ottedin Investments Pty Ltd v Portbury Developments Co Pty Ltd,[15] Dixon J considered an application for summary judgment under s 63 of the SCA. Dixon J summarised the applicable principles for the facts in that case, as follows:[16]
[15][2011] VSC 222 (‘Ottedin v Portbury’).
[16]Ottedin v Portbury, [18].
(a)If a proceeding or defence, or any particular claim, cause of action or ground of defence (‘claim’) is hopeless, untenable, bound to fail, or could not possibly succeed, then it ought be summarily dismissed. In other words, a claim which ought be dismissed under the old test will be dismissed under s 63 of the Civil Procedure Act;
(b)Section 63, however, [is] less stringent than the pre-existing law in Victoria and under similar statutory provisions in other jurisdictions. It does not direct an inquiry into whether a certain and concluded determination could be made that the proceeding, or a claim, would necessarily fail. What [is] required [is] a practical judgment by the court as to whether a claim has more than a ‘fanciful’ prospect of success;
(c)The court’s discretion whether to exercise the power of summary dismissal is very wide and as expressed in s 64 of the Civil Procedure Act, [is] based in a consideration of the interests of justice. The Act provides discretion in Pt 2.1. The discretion [is] to be exercised to facilitate the just, efficient, timely and cost-effective resolution of the real issue in dispute between the parties. The court’s powers in furthering the overarching purpose [are] facilitated by having regard to the objects and matters set out in s 9 of the Act;
(d)The court could be satisfied, on an interlocutory application, that there [is] no real prospect of success in a civil proceeding but nevertheless consider the dispute to be of such a nature that only a full hearing on the merits [is] appropriate. Whether a full hearing on the merits [is] appropriate [is] a relevant discretionary consideration in the circumstances of each proceeding;
(e)The power to order summary dismissal [is] to be exercised with great care, as a trial upon evidence of issues raised [is] the well-settled approach to the determination of litigation. When proceeding on a summary application to assess the prospect of success, a judge ought to feel confident that an assessment can properly be made of whether the overarching purpose is facilitated on dismissal of the impugned claims;
(f)That argument directed to the issues relevant on the application, perhaps even extensive submissions, may be necessary to demonstrate that the case of the plaintiff [has] no real prospect of success [is] not ordinarily a relevant consideration.
Dixon J referred to French CJ and Gummow J’s reasons in the judgment for Spencer v Commonwealth,[17] where their honours ‘noted that the exercise of powers to summarily terminate proceedings must always be attended with caution’[18] and that a summary dismissal ‘requires is a practical judgment by the court as to whether the plaintiff has more than a “fanciful” prospect of success.’[19] In discussing the power of summary dismissal of a matter that has no real prospect of success their honours said:[20]
The section authorises summary disposition of proceedings on a variety of bases under its general rubric. It will apply to the case in which there is unanswerable or unanswered evidence of a fact fatal to the pleaded cases and any case which might be propounded by permissible amendment. It will include the class of case in the longstanding category of cases which are ‘frivolous or vexatious or an abuse of process.’ The application of [the section] is not, in terms, limited to those categories.
…
… that may be a judgment of law or of fact, or of mixed law and fact. Where there are factual issues capable of being disputed and in dispute, summary dismissal should not be awarded to the respondent simply because the Court has formed the view that the applicant is unlikely to succeed on the factual issue. …
[17](2010) 241 CLR 118 (‘Spencer’).
[18]Ottedin v Portbury, [15] citing Spencer.
[19]Ottedin v Portbury, [15] citing Spencer.
[20]Spencer, [22], [25].
The authorities establish the following principles:
(a)the power to terminate proceedings summarily should be exercised with caution;
(b)the court’s discretion to exercise the power of summary dismissal is wide;
(c)the discretion is to be exercised to facilitate the just, efficient, timely and cost-effective resolution of the dispute;
(d)what is required is a practical judgment by the court as to whether a claim has more than a ‘fanciful’ prospect of success; real as opposed to fanciful prospect of success test prescribed by s 63; and
(e)a judge ought to feel confident that an assessment can properly be made of whether the overarching purpose is facilitated on dismissal of the impugned claims.
Findings
I find that Mr Donald was the person who entered into each of the consumer agreements with the consumers, and that such agreements were unsolicited consumer agreements, and that Mr Donald did not comply with the legislative requirements applicable to unsolicited consumer agreements.
Mr Donald did not appear at the hearing for the application for summary judgment, despite being served with a summons on 4 May 2016 and again on 2 August 2016. Mr Donald did not file a defence or any affidavit evidence to contest any of the allegations or evidence filed against him.
I am satisfied that in determining whether Mr Donald breached the ACLAFTA it is not necessary or appropriate to have a full hearing on the merits. I am satisfied that the evidence before me discloses breaches of the applicable requirements of dealers entering into unsolicited consumer agreements by Mr Donald.
I am satisfied that the overarching purpose of facilitating the just, efficient, timely and cost-effective resolution of the dispute is satisfied by summarily dismissing the application for declaration in favour of the Director.
The Director seeks a declaration that the above provisions were breached by Mr Donald, either:
(a)under s 36 of the SCA, which provides that ‘a proceeding is not open to objection on the ground that a merely declaratory judgment is sought, and the Court may make binding declarations of right without granting consequential relief;’ or
(b)under s 216(2)(h) of the ACLAFTA, which provides that the court may make ‘an order declaring that the person against whom the proceedings were brought has contravened a provision of this Act or the regulations.’
I find that the Director is entitled to the declarations sought under both provisions. I declare that Mr Donald has contravened provisions of the ACLAFTA and I make such a declaration without granting consequential relief.
The Director seeks final relief in the form of an injunction under s 232 (sub-ss (1) and (5)) of the ACL (Vic); compensation orders under s 237 of the ACL (Vic); and pecuniary penalties under s 224 of the ACL (Vic).
The Director is a regulator for the purposes of seeking an injunction under s 232 and interim injunctions under s 234 of the ACL (Vic) by virtue of s 10(1) of the ACLAFTA.[21] The Supreme Court of Victoria is a court for ACL (Vic) purposes by virtue of s 223[22] of the ACLAFTA and is the appropriate forum for hearing the proceeding and the applications for the relief sought by the Director.
[21]Section 10(1) of the ACLAFTA says that ‘[i]n the [ACL (Vic)], regulator means the Director.’ Section 3 of the ACLAFTA defines as follows: ‘Director means the person who, for the time being, is employed as Director of Consumer Affairs Victoria under the Public Administration Act 2004.’
[22]Section 223(1) Subject to subsections (2), (3) and (4) and sections 224 and 225, in the [ACL (Vic)], court means— (a) the Supreme Court; (b) the County Court; (c) the Magistrates' Court; (d) VCAT. (2) In sections 218, 224, 246 and 247 of the [ACL (Vic)], court does not include VCAT. (3) In respect of section 232 of the Australian Consumer Law (Victoria)— (a) VCAT may not issue an order under that section, except for the purposes of subsection (3); (b) only the Supreme Court may issue an order of the kind described in subsection (5). (4) In section 250 of the [ACL (Vic)], court does not include the Magistrates' Court.
As to the question of relief it seems sensible to hear from Mr Donald as to his ability to make payments and derive income.
In my opinion it is not appropriate to make orders for final relief until such time as Mr Donald is given the opportunity to be heard on the matter.
Proposed orders and declarations
Accordingly, I propose to order and declare as follows:
That between 1 January 2016 and 26 February 2016, Mr Donald, in connection with the supply or possible supply of the services identified in Schedule A of the originating motion to the consumers, and on the dates identified in Part A of Schedule B of the originating motion, by way of unsolicited consumer agreements entered into with the consumers in their homes:
(a)made consumer agreements with the consumers but failed, as soon as practicable and in any event before starting to negotiate a consumer agreement, to:
i.inform the consumers that he was obliged to leave the consumers’ premises immediately upon being requested to do so, and on each occasion contravened s 74(b) of the ACL (Vic); and
ii.provide the consumers with information as to his name, and on each occasion contravened s 74(c) of the ACL (Vic);
(b)made consumer agreements with the consumers but failed to inform the consumers of:
i.their right to terminate the consumer agreements during the termination period, and on each occasion contravened s 76(a)(i) of the ACL (Vic);
ii.the way in which the consumers may exercise their right to terminate the consumer agreements, and on each occasion contravened s 76(a)(ii) of the ACL (Vic); and
iii.the effect of s 86 of the ACL (Vic) which prohibits a supplier of goods or services from supplying those goods or services under a consumer agreement, accepting or requiring payment for those goods or services during the period of 10 business days commencing on the first business day after the day upon which the consumer agreement was made and on each occasion contravened s 76(a)(ii) of the ACL (Vic);
(c)made consumer agreements with the consumers but failed to give them, in the consumer agreement documents he gave the consumers, the information set out in paragraphs (b)(i) to (iii) above and on each occasion contravened s 76(b) of the ACL (Vic);
(d)made consumer agreements with the consumers but failed to give them, on the front page of the consumer agreement documents he gave the consumers, a notice that conspicuously and prominently informed the consumers of their right to terminate those agreements and on each occasion contravened s 79(b)(i) of the ACL (Vic);
(e)made consumer agreements with the consumers, but failed to include in the consumer agreement documents he gave the consumers, the following information:
i.the text ‘Important Notice to the Consumer’;
ii.the text ‘you have a right to cancel this agreement within 10 business days from and including the day after you signed or received this agreement’;
iii.the text ‘Details about your additional rights to cancel this agreement are set out in the information attached to this agreement’—
and on each occasion contravened s 79(b)(ii) of the ACL (Vic);
(f)made consumer agreements with the consumers but failed to include in the consumer agreement documents he gave the consumers, a copy of the notice that could be used by the consumers to terminate the consumer agreements and on each occasion contravened s 79(c)(i) of the ACL (Vic); and
(g)made consumer agreements with the consumers but failed to ensure that the consumer agreement documents he gave the consumers were printed clearly or typewritten and on each occasion contravened s 79(e) of the ACL (Vic).
That between 1 January and 26 February 2016, Mr Donald, in connection with the supply or possible supply of the services identified in Schedule A of the originating motion to the consumers, and on the dates identified in Part A of Schedule B of the originating motion, by way of unsolicited consumer agreements entered into with the consumers in their homes:
(a) by supplying each of the consumers with carpet cleaning services under the consumer agreements during the period of 10 business days starting on the first business day after their consumer agreement was given to them, on each occasion, contravened s 86(1)(a) of the ACL (Vic); and
(b)by requiring payment for supplying each of the consumers with carpet cleaning services under the consumer agreements during the period of 10 business days starting on the first business day after their consumer agreement was given to them, on each occasion, contravened s 86(1)(c) of the ACL (Vic).
That between 27 February 2016 and 15 March 2016, Mr Donald, in connection with the supply or possible supply of the services identified in Schedule A of the originating motion to the consumers, and on the dates identified in Part A of Schedule B of the originating motion, by way of unsolicited consumer agreements entered into with the consumers in their homes:
(a)made consumer agreements with the consumers but failed, as soon as practicable and in any event before starting to negotiate a consumer agreement, to:
i.inform the consumers that he was obliged to leave the consumers’ premises immediately upon being requested to do so and on each occasion contravened s 74(b) of the ACL (Vic); and
ii.provide the consumers with information as to his name and on each occasion contravened s 74(c) of the ACL (Vic);
(b)made consumer agreements with the consumers but failed to inform the consumers of:
i.their right to terminate the consumer agreements during the termination period and on each occasion contravened s 76(a)(i) of the ACL (Vic);
ii.the way in which the consumers may exercise their right to terminate the consumer agreements and on each occasion contravened s 76(a)(ii) of the ACL (Vic); and
iii.the effect of s 86 of the ACL (Vic) which prohibits a supplier of services from supplying those services under a consumer agreement, accepting or requiring payment for those services during the period of 10 business days commencing on the first business day after the day upon which the consumer agreement was made and on each occasion contravened s 76(a)(ii) of the ACL (Vic);
(c)made consumer agreements with the consumers but failed to ensure that the consumer agreement documents he gave the consumers were printed clearly or typewritten and on each occasion contravened s 79(e) of the ACL (Vic).
That between 27 February 2016 and 15 March 2016, Mr Donald, in connection with the supply or possible supply of the services to the consumers, and on the dates identified, by way of unsolicited consumer agreements entered into with the consumers in their homes:
(a)by supplying each of the consumers with carpet cleaning services under the consumer agreements during the period of 10 business days starting on the first business day after their consumer agreement was given to them, on each occasion, contravened s 86(1)(a) of the ACL (Vic); and
(k)by requiring payment for supplying each of the consumers with carpet cleaning services under the consumer agreements during the period of 10 business days starting on the first business day after their consumer agreement was given to them, on each occasion, contravened s 86(1)(c) of the ACL (Vic).
The hearing on orders for final relief is adjourned to a date to be fixed.
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