Director of Consumer Affairs Victoria v The Good Guys Discount Warehouses (Australia) Pty Ltd
[2016] FCA 22
•3 February 2016
FEDERAL COURT OF AUSTRALIA
Director of Consumer Affairs Victoria v The Good Guys Discount Warehouses (Australia) Pty Ltd [2016] FCA 22
File numbers: VID 507 of 2014
VID 508 of 2014Judge: MOSHINSKY J Date of judgment: 3 February 2016 Catchwords: TRADE PRACTICES – misleading and deceptive conduct – statements by salespeople regarding extended warranties – alleged failure to refer to consumer guarantees in Australian Consumer Law – whether conduct was misleading or deceptive or likely to mislead or deceive
EVIDENCE – Admissibility of evidence – s 138 of the Evidence Act 1995 (Cth) – officers of regulator posing as customers interested in purchasing television – secret recording of conversations with salespeople – whether evidence obtained improperly or in contravention of Australian law – whether officers acted beyond power – whether entry was trespass – whether recording breached salesperson’s right to privacy in contravention of Charter of Human Rights and Responsibilities Act 2006 (Vic)
HUMAN RIGHTS – right to privacy – officers of regulator posing as customers interested in purchasing television – secret recording of conversations with salespeople – whether recording breached salesperson’s right to privacy – whether private conversation – Charter of Human Rights and Responsibilities Act 2006 (Vic), ss 13, 38
Legislation: Australian Consumer Law and Fair Trading Act 2012 (Vic) ss 107, 108, 109, 110, 111, 142, 143, 144, 145, 149-181
Charter of Human Rights and Responsibilities Act 2006 (Vic) ss 13, 38
Competition and Consumer Act 2010 (Cth), Sch 2, Australian Consumer Law, ss 2, 4, 18, 29(1)(l) and (m), 51-59, 228, 232, 246, 247, 259-261, 263, 264
Evidence Act 1995 (Cth) s 138
Fair Trading Act 1999 (Vic) s 120
Public Administration Act 2004 (Vic)
Trade Practices Act 1974 (Cth) s 52(1)
Canadian Charter of Rights and Freedoms, s 8
European Convention on Human Rights, art 8(1)
International Covenant on Civil and Political Rights, art 17(1)
Cases cited: Australian Competition and Consumer Commission v TPG Internet Pty Ltd (2013) 250 CLR 640
Barker v The Queen (1983) 153 CLR 338
Barker v The Queen (1994) 54 FCR 451
Bunning v Cross (1978) 141 CLR 54
Butcher v Lachlan Elder Realty Pty Ltd (2004) 218 CLR 592
Byrne v Kinematrograph Renters Society Ltd [1958] 1 WLR 762
Campbell v Backoffice Investments Pty Ltd (2009) 238 CLR 304
Campomar Sociedad, Limitada v Nike International Limited (2000) 202 CLR 45
Clough v Leahy (1904) 2 CLR 139
Concrete Constructions (NSW) Pty Limited v Nelson (1990) 169 CLR 594
Demagogue Pty Ltd v Ramensky (1992) 39 FCR 31
Duarte v R [1990] 1 SCR 30
Employment Advocate v Williamson (2001) 111 FCR 20
Essendon Football Club v Chief Executive Officer of the Australian Sports Anti-Doping Authority (2014) 227 FCR 1
Hird v Chief Executive Officer of the Australian Sports Anti-Doping Authority (2015) 227 FCR 95
Kaba v Magistrates’ Court of Victoria [2014] VSC 52
Kimberley NZI Finance Ltd v Torero Pty Ltd [1989] ATPR (Digest) 53,193
Kӧpke v Germany (2011) 53 EHHR SE26
Miller & Associates Insurance Broking Pty Ltd v BMW Australia Finance Ltd (2010) 241 CLR 357
Minister for Aboriginal Affairs v Peko-Wallsend Ltd (1986) 162 CLR 24
Nottingham City Council v Amin [2000] 1 WLR 1071
O’Reilly v Commissioners of the State Bank of Victoria (1983) 153 CLR 1
Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd (1982) 149 CLR 191
Parker v Comptroller-General of Customs (2009) 252 ALR 619
Pretty v United Kingdom (2002) 35 EHRR 1
R v Sloane (1990) 49 A Crim R 270
Ridgeway v The Queen (1995) 184 CLR 19
Robinson v Woolworths Ltd (2005) 64 NSWLR 612
Street v Luna Park Sydney Pty Ltd (2009) 223 FLR 245
Von Hannover v Germany (2005) 40 EHHR 1
Aronson and Groves, Judicial Review of Administrative Action (5th ed, Lawbook Co, 2013)
Date of hearing: 5, 6, 9, 12 and 13 November 2015 Registry: Victoria Division: General Division National Practice Area: Commercial and Corporations Sub-area: Regulator and Consumer Protection Category: Catchwords Number of paragraphs: 214 Counsel for the Applicant: M J Colbran QC with S Bhojani Solicitor for the Applicant: P Hiland Counsel for the Respondents: J H Karkar QC with P H Wallis Solicitor for the Respondents: Clayton Utz ORDERS
VID 507 of 2014 BETWEEN: DIRECTOR OF CONSUMER AFFAIRS VICTORIA
ApplicantAND: THE GOOD GUYS DISCOUNT WAREHOUSES (AUSTRALIA) PTY LTD (ACN 004 880 657)
RespondentJUDGE:
MOSHINSKY J
DATE OF ORDER:
3 FEBRUARY 2016
THE COURT ORDERS THAT:
1.The proceeding be dismissed.
2.By 4:00 pm on 10 February 2016, each party file and serve a written submission on costs.
3.By 4:00 pm on 17 February 2016, each party file and serve any responding submission on costs.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
ORDERS
VID 508 of 2014 BETWEEN: DIRECTOR OF CONSUMER AFFAIRS VICTORIA
ApplicantAND: PARKE MUIR'S PTY LTD (ACN 092 974 797)
RespondentJUDGE:
MOSHINSKY J
DATE OF ORDER:
3 FEBRUARY 2016
THE COURT ORDERS THAT:
1.The proceeding be dismissed.
2.By 4:00 pm on 10 February 2016, each party file and serve a written submission on costs.
3.By 4:00 pm on 17 February 2016, each party file and serve any responding submission on costs.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
REASONS FOR JUDGMENT
MOSHINSKY J:
A. INTRODUCTION
In these proceedings, the Director of Consumer Affairs Victoria (the Director) alleges that the respondents, which trade under the name “The Good Guys”, engaged in misleading and deceptive conduct, or conduct which was likely to mislead and deceive, in connection with the promotion of goods and extended warranties for goods for sale by the respondents. Broadly speaking, the Director’s case is that the respondents’ salespeople made inaccurate statements about the position the customer would be in if a product failed or was faulty after the expiry of the manufacturer’s warranty, and that they failed to refer to the consumer guarantees and related remedies in the Australian Consumer Law, and so engaged in conduct that was misleading or deceptive or likely to mislead or deceive. The effect of this, it is alleged, was to exaggerate the benefits of obtaining an extended warranty and so to induce customers to purchase such a warranty.
The Director’s case is based on five store visits, that is, visits by Consumer Affairs Victoria (CAV) inspectors to stores operated by the respondents. In issue in the proceedings were visits to the following stores:
(a)Melton store;
(b)Nunawading store;
(c)Chadstone store in March 2013 (First Chadstone Store Visit);
(d)Chadstone store in October 2013 (Second Chadstone Store Visit); and
(e)Geelong store.
The first four store visits are the subject of proceeding No VID 507 of 2014, while the fifth store visit is the subject of proceeding No VID 508 of 2014. This reflects the fact that the Melton, Nunawading and Chadstone stores are operated by the respondent to proceeding No VID 507 of 2014, namely The Good Guys Discount Warehouses (Australia) Pty Ltd, while the Geelong store is operated by the respondent to proceeding No VID 508 of 2014, namely, Parke Muir’s Pty Ltd. As noted above, both respondents trade under the name “The Good Guys” and, for the purposes of legal analysis, there is no relevant distinction between them. It will be convenient, therefore, to refer to them each (and together) as “The Good Guys”.
On each occasion when CAV inspectors visited a store, they posed as customers interested in purchasing a television. Generally, they engaged the salesperson or staff member in a conversation about the merits of different television brands and then asked some questions about warranties. On four out of the five occasions (all except for the First Chadstone Store Visit), the CAV inspectors secretly recorded the conversation using a digital recorder. A transcript of the conversation was subsequently prepared from the audio file. In each proceeding, the respondent filed an interlocutory application seeking an order pursuant to s 138 of the Evidence Act 1995 (Cth) (Evidence Act) that the evidence of the store visits be excluded on the basis that it was obtained improperly or in contravention of an Australian law (or in consequence of an impropriety or of a contravention of an Australian law).
Those interlocutory applications were set down for hearing at the same time as the trial, due to the overlap of issues between the interlocutory applications and the issues to be examined at trial, and are dealt with in this judgment. Briefly, the respondents contended that the CAV inspectors acted beyond their power in entering the stores and asking questions posing as customers and secretly recording the conversations; that the evidence was obtained through trespass; and that secretly recording the conversations breached each salesperson’s right to privacy in contravention of s 38 of the Charter of Human Rights and Responsibilities Act 2006 (Vic) (the Charter). The Director contended that the evidence of the store visits was not obtained improperly or in contravention of an Australian law and, in the alternative, that it should be admitted in the exercise of the discretion in s 138 of the Evidence Act.
The Director’s misleading and deceptive conduct case is based on the conduct (statements and omissions) of the relevant salesperson or staff member during each of the store visits. The Director does not allege that The Good Guys engaged in a general practice of misleading and deceptive conduct in relation to extended warranties or consumer guarantees.
In summary, for the reasons that follow, I have concluded as follows:
(a)In relation to the objections to evidence based on s 138 of the Evidence Act, I have concluded that the evidence should be admitted. In my view, the evidence was not obtained improperly or in contravention of an Australian law, or obtained in consequence of an impropriety or of a contravention of an Australian law, and therefore it falls outside s 138.
(b)In relation to each of the five store visits, in my view The Goods Guys’ conduct was not misleading or deceptive or likely to mislead or deceive. Broadly, my reasons for rejecting the Director’s misleading and deceptive conduct case can be summarised as follows. Each store visit needs to be considered separately. In each case, it is necessary to consider the conversation as a whole. In several cases, the words used in the conversation (both in the questions and the answers) were vague and general, making it difficult to conclude that the statement was an inaccurate description of the position of the customer if, for example, his or her television broke down after 12 months and the customer had not purchased the extended warranty. In some cases, the focus of the discussion (both the questions and the answers) was on the practice in relation to warranties and dealing with problems rather than with rights and remedies. This makes it difficult to conclude that the failure of the salesperson or staff member to refer to the consumer guarantees and related remedies in the Australian Consumer Law was misleading or deceptive or likely to mislead or deceive. In all cases, the statements and omissions relied on by the Director formed part of a course of conduct which included The Good Guys making available in the store their extended warranty brochure. This provided a description of the consumer guarantees and related remedies in the Australian Consumer Law. In addition, there are further particular reasons for rejecting the Director’s misleading and deceptive conduct case with respect to each store visit.
B. PLEADINGS AND PROGRESS OF THE TRIAL
Each proceeding was commenced with a Fast Track Application. The Director’s pleading at trial in each proceeding was set out in a Revised Fast Track Statement. In proceeding No VID 507 of 2014, the respondent’s response was set out in a Further Amended Fast Track Response, filed with leave during the trial. In proceeding No VID 508 of 2014, the respondent’s response was its Amended Fast Track Response. In each proceeding, the Director filed a Fast Track Reply.
In each proceeding, the Director alleged in his pleading, and the respondent admitted, that the Director is a public official whose office is established by s 107 of the Australian Consumer Law and Fair Trading Act 2012 (Vic) (the Victorian Act) and that in that capacity the Director is:
(a)any other person for the purposes of s 232 of the Australian Consumer Law (Australian Consumer Law), being Sch 2 to the Competition and Consumer Act 2010 (Cth); and
(b)is authorised by ss 109 and 110(1) of the Victorian Act and ss 228, 232, 246 and 247 of the Australian Consumer Law (Victoria), being the Australian Consumer Law text as applied by the Victorian Act, to bring the proceeding.
As the text of the Australian Consumer Law and the Australian Consumer Law (Victoria) are the same, it is sufficient to refer hereafter to the Australian Consumer Law.
Further, in each proceeding, the Director alleged, and the respondent admitted, that the respondent at all material times:
(a)was a corporation for the purposes of s 4 of the Competition and Consumer Act 2010 (Cth) by virtue of being a trading corporation formed within the limits of Australia; and
(b)was carrying on business in Victoria and elsewhere in Australia as a retail supplier of consumer goods and services.
Part of the Director’s case as pleaded in proceeding No VID 507 of 2014 related to interactions between The Good Guys’ Melton store and a Mr and Mrs Seeger. It was alleged that the Seegers had purchased a Samsung refrigerator/freezer, that Mrs Seeger subsequently found the unit to be defective, and that The Good Guys made certain statements to Mrs Seeger and did not inform her of certain matters, which conduct was alleged to have been misleading or deceptive. The Director filed an affidavit of Mrs Seeger but was unable to make contact with her in the lead up to trial. Consequently, the Director was unable to secure her attendance at trial to give evidence and indicated that he would not pursue the case based on Mrs Seeger’s affidavit. As a consequence, the respondents did not call three proposed witnesses whose evidence was responsive to the affidavit of Mrs Seeger.
Putting to one side, then, the case relating to Mr and Mrs Seeger, the conduct in issue in the two proceedings related to the five store visits referred to above. The format of the pleading with respect to each store visit was similar. In each case, the pleading referred to the date of the store visit, the names of the CAV inspectors who attended, the fact that they posed as potential or prospective customers seeking information in relation to buying a television, and (save in the case of the First Chadstone Store Visit) the fact (which was admitted) that the salesperson was an employee of The Good Guys and was acting in the course of his duties and speaking for and on behalf of The Good Guys.
The pleading (with respect to each store visit) then set out the statements alleged to have been made by the salesperson during the conversation and certain matters which, it was alleged, the salesperson did not inform or say or explain to the Director’s staff. Then, in respect of each store visit, it was alleged that the conduct constituted conduct in trade or commerce which was misleading or deceptive or likely to mislead or deceive contrary to s 18 of the Australian Consumer Law. Further, it was alleged that conduct constituted a contravention of ss 29(1)(l) and (m) of the Australian Consumer Law.
The relief sought by the Director, as set out in the Fast Track Application in each proceeding, comprises: declarations that The Good Guys contravened the relevant provisions; injunctions; non-punitive publication orders or adverse publicity orders; pecuniary penalties; and costs.
Although no formal order was made to this effect, it was common ground before me that the trial was concerned only with the question of liability, and all questions concerning relief were deferred to be dealt with later, if necessary.
The two proceedings were tried together. As each proceeding concerned distinct store visits, no order was made that evidence in one proceeding be evidence in the other. However, the issues raised by the respondents’ interlocutory applications overlapped and therefore an order was made, by consent, that the evidence in one interlocutory application be evidence in the other.
The Director relied on affidavits from the following witnesses:
(a)Ms Tina Montero, a Senior Compliance and Enforcement Officer at CAV who attended the Melton, Nunawading and Geelong store visits;
(b)Mr Hayden Bellis, a Compliance and Enforcement Officer at CAV who attended the Melton, Nunawading and Geelong store visits;
(c)Ms Mindy Lim, a Compliance and Enforcement Officer at CAV, who attended the Second Chadstone Store Visit;
(d)Ms Emma Bruton, a Senior Compliance and Enforcement Officer at CAV, who attended the First Chadstone Store Visit;
(e)Mr John (Sam) Vines, who was at the relevant time a Compliance and Enforcement Officer at CAV and who attended the First Chadstone Store Visit;
(f)Ms Kathryn Bannon, the General Manager of the Enforcement and Legal Services branch of CAV;
(g)Mr Chris Vlahakis, a Compliance and Enforcement Officer at CAV, who attended the Second Chadstone Store Visit;
(h)Mr Scott Gregson, the Executive General Manager, Consumer Enforcement at the Australian Competition and Consumer Commission (ACCC);
(i)Mr Michael Cooper, the Director of Consumer Protection in the Office of New South Wales Fair Trading (NSW Fair Trading);
(j)Mr Peter Hiland, a solicitor employed by CAV.
There was no cross-examination of Mr Gregson, Mr Cooper or Mr Hiland. There were objections on the grounds of relevance to some of the affidavit material, which the parties were content for me to deal with as part of this judgment. I deal with those objections in Section E below.
The respondents relied on affidavits from the following witnesses:
(a)Mr Yasmin Yugo, who was the salesperson at the Nunawading store visit;
(b)Mr Sunil Shirke, who was the salesperson at the Second Chadstone Store Visit;
(c)Mr Adam Missen, the Store Manager at the Geelong store;
(d)Mr Robert Gauron, the Store Manager at the Melton store;
(e)Mr Travice De Silva, the Store Manager at the Chadstone store;
(f)Mr Andrew Burnett, a solicitor at Clayton Utz.
The Director did not require Mr Missen, Mr Gauron, Mr De Silva or Mr Burnett to attend for cross-examination. There were no objections to the affidavits of these witnesses, but the Director did raise a relevance objection to a bundle of documents tendered by the respondents. I deal with that objection in Section E below.
C. THE GOOD GUYS’ BUSINESS, THE CONSUMER GUARANTEES AND THE EXTENDED WARRANTY
Before turning to the specific issues to be determined, I set out some basic facts concerning The Good Guys’ business, the consumer guarantees and the extended warranty offered by The Good Guys at the relevant time.
The Good Guys’ business
The Good Guys is a retailer which offers to sell and sells consumer goods to members of the public.
The consumer guarantees
It was alleged in the Director’s pleadings, and admitted by the respondents, that goods sold by The Good Guys are subject to the following consumer guarantee and remedy provisions in the Australian Consumer Law:
(a)ss 54, 55, 56 and 57; and
(b)ss 259, 260, 261, 263 and 264.
Sections 54 to 57 fall within Division 1 of Part 3-2 of the Australian Consumer Law. That Division is headed “Consumer guarantees”. Subdivision A within that Division, comprising ss 51-59, sets out guarantees relating to the supply of goods. Section 54 contains a guarantee as to acceptable quality. It provides:
(1) If:
(a) a person supplies, in trade or commerce, goods to a consumer; and
(b) the supply does not occur by way of sale by auction;there is a guarantee that the goods are of acceptable quality.
(2) Goods are of acceptable quality if they are as:
(a)fit for all the purposes for which goods of that kind are commonly supplied; and
(b) acceptable in appearance and finish; and
(c) free from defects; and
(d) safe; and
(e) durable;as a reasonable consumer fully acquainted with the state and condition of the goods (including any hidden defects of the goods), would regard as acceptable having regard to the matters in subsection (3).
(3) The matters for the purposes of subsection (2) are:
(a) the nature of the goods; and
(b) the price of the goods (if relevant); and(c)any statements made about the goods on any packaging or label on the goods; and
(d)any representation made about the goods by the supplier or manufacturer of the goods; and
(e)any other relevant circumstances relating to the supply of the goods.
(4) If:
(a) goods supplied to a consumer are not of acceptable quality; and
(b)the only reason or reasons why they are not of acceptable quality were specifically drawn to the consumer’s attention before the consumer agreed to the supply;
the goods are taken to be of acceptable quality.
(5) If:
(a) goods are displayed for sale or hire; and
(b)the goods would not be of acceptable quality if they were supplied to a consumer;
the reason or reasons why they are not of acceptable quality are taken, for the purposes of subsection (4), to have been specifically drawn to a consumer’s attention if those reasons were disclosed on a written notice that was displayed with the goods and that was transparent.
(6) Goods do not fail to be of acceptable quality if:
(a)the consumer to whom they are supplied causes them to become of unacceptable quality, or fails to take reasonable steps to prevent them from becoming of unacceptable quality; and
(b)they are damaged by abnormal use.
(7) Goods do not fail to be of acceptable quality if:
(a)the consumer acquiring the goods examines them before the consumer agrees to the supply of the goods; and
(b)the examination ought reasonably to have revealed that the goods were not of acceptable quality.
Section 55 contains a guarantee as to fitness for any disclosed purpose. Section 56 is a guarantee relating to the supply of goods by description and s 57 contains guarantees relating to the supply of goods by sample or demonstration model.
Sections 259-261, 263 and 264 are contained within Part 5-4 of the Australian Consumer Law, which is headed “Remedies relating to guarantees”. Section 259 concerns actions against suppliers of goods and provides:
(1) A consumer may take action under this section if:
(a)a person (the supplier) supplies, in trade or commerce, goods to the consumer; and
(b)a guarantee that applies to the supply under Subdivision A of Division 1 of Part 3 2 (other than sections 58 and 59(1)) is not complied with.
(2)If the failure to comply with the guarantee can be remedied and is not a major failure:
(a)the consumer may require the supplier to remedy the failure within a reasonable time; or
(b)if such a requirement is made of the supplier but the supplier refuses or fails to comply with the requirement, or fails to comply with the requirement within a reasonable time—the consumer may:
(i)otherwise have the failure remedied and, by action against the supplier, recover all reasonable costs incurred by the consumer in having the failure so remedied; or
(ii)subject to section 262, notify the supplier that the consumer rejects the goods and of the ground or grounds for the rejection.
(3)If the failure to comply with the guarantee cannot be remedied or is a major failure, the consumer may:
(a)subject to section 262, notify the supplier that the consumer rejects the goods and of the ground or grounds for the rejection; or
(b)by action against the supplier, recover compensation for any reduction in the value of the goods below the price paid or payable by the consumer for the goods.
(4)The consumer may, by action against the supplier, recover damages for any loss or damage suffered by the consumer because of the failure to comply with the guarantee if it was reasonably foreseeable that the consumer would suffer such loss or damage as a result of such a failure.
(5)Subsection (4) does not apply if the failure to comply with the guarantee occurred only because of a cause independent of human control that occurred after the goods left the control of the supplier.
(6)To avoid doubt, subsection (4) applies in addition to subsections (2) and (3).
(7)The consumer may take action under this section whether or not the goods are in their original packaging.
As can be seen, s 259 deals with a number of distinct scenarios: where the failure to comply with the guarantee can be remedied and is not a major failure; where the failure to comply with the guarantee cannot be remedied; and where the failure to comply with the guarantee is a major failure. The concept of a “major failure” is defined in s 260. Section 261 deals with how suppliers may remedy a failure to comply with a guarantee. Section 263 deals with the consequences of rejecting goods and s 264 deals with replaced goods.
The affidavit material filed by the Director annexes a document titled “Consumer guarantees – a guide for consumers”, dated 2013, with the ACCC logo on the cover. CAV is listed as one of the contacts on the last page of the document. I set out some brief extracts from this document to indicate a way in which the content of some of the relevant consumer guarantees and remedies can be summarised for consumers. Under the heading “Consumer guarantees for goods”, the document explains:
The consumer guarantees are intended to ensure that you get the product you paid for and that it does what it is meant to do. There are nine guarantees that apply to goods.
Then, in relation to the guarantee of acceptable quality, the guide states:
Acceptable quality
There is a guarantee that goods are of acceptable quality if they:
· are safe, durable and free from defects
· are acceptable in appearance and finish
· do everything that they are commonly used for.
When deciding whether goods meet this guarantee, you need to consider the nature of the goods, the price, and any information provided directly by the seller or the manufacturer, or on packaging or promotional material.
You should also consider how you have used the product. Goods are not expected to be indestructible – for example, if you damage the goods or use goods in an unreasonable or unintended manner, you may not be able to rely on this guarantee to obtain a remedy.
Second-hand goods are also covered by the guarantee, but age, price and condition must be taken into account.
The guarantee of acceptable quality still applies to imperfect goods or ‘seconds’. Where a seller alerts you to any defects before the purchase, you should inspect before you buy to make sure you are still happy to go ahead. Otherwise you may not be entitled to a remedy.
A consumer purchases a new pair of shoes, one of which loses a heel when it is worn for the first time.
The consumer can claim that the shoe does not meet the guarantee of acceptable quality.
Later in the consumer guide there is a section headed “When goods or services don’t meet a guarantee”. This section states in part as follows:
When goods or services don’t meet a guarantee
If a product or service you buy fails to meet a guarantee, you have a right to a remedy such as:
· refund
· repair
· replacement or exchange
· compensation
· cancellation of contract.
The remedy you are entitled to will depend on whether the failure to comply with the guarantee is major or minor.
Minor failures
Minor failures to comply with a consumer guarantee can normally be fixed or resolved in a reasonable amount of time. In this case, the seller can choose to offer you a refund, replacement or repair or, in the case of services, resupply.
This must be provided free of charge and within a reasonable time depending on the circumstances.
If the seller refuses to fix the problem or takes too long, you may be able to get it fixed by someone else and recover the costs from the seller.
Major failures
Major problems cannot be fixed or are too difficult to fix.
There is a major failure to comply with a consumer guarantee when:
· you would not have purchased the product if you had known about the problem. For example, you would not have bought the washing machine if you had known the motor would fail after three months.
· the product is significantly different from the description, sample or demonstration model you were shown. For example, you ordered a red bicycle from a catalogue but the bicycle delivered was green.
· the product is substantially unfit for its normal purpose and cannot easily be made fit within a reasonable time. For example, the raincoat you bought is not waterproof because it is made from the wrong material.
· the product is substantially unfit for a purpose that you told the supplier about, and cannot easily be made fit within a reasonable time. For example, you told the seller you needed a car to tow a boat, but the car they sold you is not powerful enough to tow your boat because its engine is too small.
· the product is unsafe. For example, the electric blanket has faulty wiring.
…
When there is a major failure with a product, you can choose to:
· return the product and ask for a refund
· return the product and ask for an identical replacement, or one of similar value if reasonably available
· keep the product and ask for compensation for the drop in value caused by the problem.
…
It is apparent from the sections of the Australian Consumer Law set out above that there is some complexity to these provisions and that the ability of a customer to rely on the consumer rights and related remedies will depend on a range of variables such as the nature of the goods, the price of the goods, any statements made about the goods on any packaging or label on the goods, any representations made about the goods by the supplier or manufacturer, and other relevant circumstances. In the context of a television that breaks down or is faulty more than 12 months after purchase, the price of the television, the time since purchase, and the nature of the problem are likely to be material factors in determining whether the rights are applicable and a remedy is available.
The extended warranty
I turn now to the extended warranty offered by The Good Guys at the relevant time (it is no longer offered as a different product or service has been introduced). Copies of a brochure relating to the extended warranty were annexed to the affidavits of Mr Jugo and Mr Shirke. They are in the same form. The same brochure was available at all The Good Guys stores relevant to these proceedings at the times of the store visits in issue.
The second page of the brochure explains that The Good Guys’ extended warranty is available for purchase on selected products that:
(a)are purchased new from The Good Guys;
(b)are manufactured for use in Australia; and
(c)include a manufacturer’s warranty valid in Australia at the time the customer originally purchased it.
After setting out the types of products in respect of which the extended warranty is available, the brochure states that extended warranty must be purchased at the same time as the customer purchases the product.
On the fourth and fifth pages of the brochure, the following explanations are provided:
Our Extended Warranty covers most breakdowns INCLUDING many caused by general wear and tear
Put simply this means that you’re covered if your product wears out over time as well as for specific mechanical breakdowns.
…
In home servicing for larger items
We’ll always organise a repairer to come to your home to repair large appliances. This includes products like washing machines, fridges, TV’s etc.
…
Automatic replacement for products under $250
Many products that cost under $250 can be time consuming to repair. All you have to do is call The Good Guys Customer Care team on 1300 368 509.
…
$250 food spoilage cover for each claim on refrigerators/freezers
There’s nothing worse than when your fridge or freezer breaks down and you lose all your food. We provide up to $250 to replace any food you might lose if your fridge or freezer breaks down. This will be paid at your request.Laundry Re-imbursement
If your laundry product (washing machine or washer dryer) is out of action for more than 10 consecutive days from the time we have been notified of the failure, you will be eligible for a credit for cleaning services up to the value of $150. You will need to provide receipts for cleaning services.
…
No lemon Cover
No lemon cover means that if the same part in a Product requires repairing more than two (2) times as a result of Mechanical or Electrical Failure, the Product will be replaced on the third visit at your request.
…As indicated in the above passages, The Good Guys’ extended warranty provided benefits which were additional to the consumer guarantees and related remedies in the Australian Consumer Law. In closing submissions, senior counsel for the Director accepted as much.
On the sixth page of the brochure, there is a prominent description of the consumer guarantees in the Australian Consumer Law, which reads as follows:
Knowing your rights…
From 1 January 2011, all products sold through The Good Guys stores are automatically covered by the Consumer Guarantees detailed in the Australian Competition and Consumer Act 2010.
This law has been designed to protect you the customer when you buy goods and services. Every time you purchase, lease or hire a good or service anywhere in Australia, you are automatically given certain rights.
The law requires that your product must be free from defects and do what it’s meant to do.
If this is not the case, you may be entitled to a remedy. The type of remedy depends on the circumstances but may include repair or for major faults, replacement of goods or a refund.
These rights are known as consumer guarantees. The availability of a remedy under the consumer guarantees however isn’t specifically detailed and the right to a remedy will depend on factors such as the age type and price of the product.
It’s important to us that you know what your rights are.
So if you would like further information about your rights and the Australian Competition and Consumer Act you can visit >
Next, there is a section headed “Frequently Asked Questions”. The first question and answer deal with the consumer guarantees:
“I’ve already got statutory rights so why do I need to buy an Extended Warranty?”
Statutory rights are valuable and provide that if you experience a fault with your product, within a reasonable period following purchase, you’re protected.
However, each case is assessed individually which is great, but also means that there’s no guarantee of any particular outcome each time.
· There’s no guarantee how long the process of assessment will take
· A remedy could be a repair, replacement or a refund
· You will need to be able to show that the product is defective or not doing what it’s meant to do
Buying an Extended Warranty offers you a level of certainty because in addition to your statutory rights, your product is protected for the amount of time you choose, after your manufacturer warranty expires.
If you have a problem, a simple phone call will ensure the problem is resolved.
You’re not obliged to purchase an Extended Warranty we simply want to give YOU the choice.
The last section of the brochure sets out the detailed terms and conditions of the extended warranty offered by The Good Guys. The first part of this section explains the interaction between the rights and benefits provided by the extended warranty and the customer’s rights under the Australian Consumer Law in the following terms:
This document sets out the Terms and Conditions of The Good Guys Extended Warranty and clarifies the rights and benefits it provides in addition to your rights under the Australian Consumer Law.
Your rights under the Australian Consumer Law
The following is a summary of your rights under the Australian Consumer Law. For further information please consult the ACCC website at Consumer Law
All goods and services supplied to consumers come with guarantees that cannot be excluded under the Australian Consumer Law. You would usually be entitled to a replacement or refund for a major failure and compensation for any other reasonably foreseeable loss or damage.
You are also entitled to have the goods repaired or replaced if the goods fail to be of acceptable quality and the failure does not amount to a major failure.
Under the Australian Consumer Law, your rights commence and continue for a “reasonable period” from the date you purchased the Product.
What is a “reasonable period” will depend upon all of the relevant circumstances, including the price, the uses to which it has been put and the nature of the Product.
In addition you may also be entitled to have the Product repaired or perhaps replaced under the terms of any Manufacturer’s Warranty relating to your Product. Information on the Manufacturer’s Warranty is contained in the Product packaging.
The benefits under your Extended Warranty are in addition to your rights and remedies under the Australian Consumer Law, any other law that applies to the goods or services that you purchase from us, and any Manufacturer’s Warranty relating to your Product.
D. THE OBJECTIONS TO EVIDENCE BASED ON SECTION 138
As noted above, in each proceeding, the respondent filed an interlocutory application seeking an order pursuant to s 138 of the Evidence Act that the evidence of the store visits be excluded on the basis that it was improperly or illegally obtained. Specifically, the interlocutory applications sought the exclusion of the following parts of the affidavits filed by the Director:
(a)in proceeding No VID 507 of 2014:
(i)Mr Bellis affirmed 13 March 2015: [8]-[15] and [19]-[38] and exhibits “HTB-1” to “HTB-3”;
(ii)Ms Montero sworn 13 March 2015: [7]-[18], [22]-[29], [34]-[36] and [56] and exhibits “TMM-1” to “TMM-8”;
(iii)Mr Vines sworn 13 March 2015: [9]-[25] and exhibits “JMSV-1” to “JMSV-4”;
(iv)Ms Bruton sworn 13 March 2014: [10]-[24] and exhibits “ELB-4” and “ELB-5”;
(v)Ms Lim sworn 18 March 2015: [7] and [12]-[21] and exhibits “ML-1” and “ML-2”; and
(vi)Mr Vlahakis affirmed 18 March 2015: [8]-[16].
(b)in proceeding No VID 508 of 2014:
(i)Mr Bellis affirmed 13 March 2015: [10]-[21] and exhibit “HTB-1”; and
(ii)Ms Montero sworn 13 March 2015: [7]-[8] and [26]-[32] and exhibits “TMM-1” and “TMM-2”.
The identified parts of the affidavits comprise nearly all of the Director’s evidence about the store visits, including the affidavit evidence of the conversation during the First Chadstone Store Visit and the transcripts of the audio recordings of the other four store visits.
The interlocutory applications came on for hearing before a judge of this Court on 12 June 2015. On that occasion, the hearing of the applications needed to be adjourned because the Director’s evidence was deficient in that it did not deal with the discretionary factors relevant to s 138(3). With the agreement of both sides, the interlocutory applications were listed for hearing on the same date as the trial.
It was common ground before me that the issues raised by the interlocutory applications should be dealt with at the same time as the other issues in the trial, and dealt with in this judgment. Thus, although the interlocutory applications are formally before the Court, I will generally refer to the issues they raise as objections to evidence based on s 138.
Facts relevant to the objections to evidence based on s 138
As already mentioned, in relation to each of the five store visits, two CAV inspectors posed as customers interested in purchasing a television. There is no doubt that, in so doing, the inspectors made false representations and conveyed a false impression to the salesperson as to their interest in purchasing a television. So much was accepted by the CAV inspectors during cross-examination. Further, as mentioned above, in relation to four of the five store visits, the inspectors secretly recorded the conversation with the salesperson using a digital recorder.
This conduct, both posing as customers and the secret recording, was undertaken by the inspectors in accordance with instructions they received from their superior officers. In the paragraphs that follow, I set out the background facts relating to the store visits and provide more detail about the way they were conducted, for the purposes of dealing with the objections based on s 138. These facts are drawn from the affidavits filed by the parties and the oral evidence. There was little dispute about these facts.
In October 2012, the Compliance and Dispute Resolution Advisory Committee (CDRAC), which is a committee responsible for the national cooperation and coordination of compliance, dispute resolution and enforcement activities relating to the Australian Consumer Law and consumer issues more generally, endorsed a National Project Plan – Extended Warranties. All Australian Consumer Law regulators were involved in this national project, which was led by the Office of Fair Trading (Queensland). The objectives of the project (as set out in the National Project Plan) were:
(a)To facilitate a nationally coordinated approach to reviewing [extended warranties] offered by retailers on goods and services to which the Australian Securities and Investments Commission (ASIC) Act and State and Territory Australian Consumer Laws (ACL) apply;
(b)To identify areas of non-compliance with the ASIC Act and ACL;
(c)To educate consumers about the protections and remedies available in the ACL and about key issues affecting decisions about whether to purchase [extended warranties];
(d)To engage with retailers who sell and provide non-compliant [extended warranties] and encourage compliance with the ASIC Act and ACL; and
(e)To take (to the extent possible) coordinated, consistent enforcement action against persons who fail to take reasonable steps to comply with the ASIC Act and ACL after encouragement from ASIC and ACL regulators.
A copy of the National Project Plan – Extended Warranties was in evidence. One of the concerns noted in the plan was that “[r]etailers may be seeking to obfuscate their consumer guarantee obligations and represent [extended warranties] as the only way of receiving remedies in the event of a problem with the product or service”. The document set out a number of other concerns with the way extended warranties were being promoted.
As explained by Ms Bannon, the project outlined in the National Project Plan – Extended Warranties had several identified phases, including:
(a)the identification of businesses who offered extended warranties nationally;
(b)the allocation of businesses to jurisdictions; and
(c)engagement by each jurisdiction with allocated business.
A working party comprising representatives of federal and state regulators was established to further the National Project Plan. Ms Bruton participated in the bulk of the working party teleconferences from 26 November 2012.
During the working party teleconference on 26 November 2012, participants discussed employing ‘mystery shopping’ to identify any misrepresentations made by traders regarding, in particular, consumer guarantees. Ms Bruton gave evidence that she understood ‘mystery shopping’ as involving going into a store, acting as a consumer, and asking various questions, which would be answered by salespeople.
On 22 January 2013, Ms Bruton attended a further working party teleconference. During the teleconference, there was further discussion about utilising ‘mystery shopping’, which was relevantly recorded in the minutes as follows:
Discussion on how best to capture matters regarding misrepresentations; the best approach to obtaining relevant evidence. The ACT confirmed they will engage retailers by mystery shopping but will not commence until mid-March to enable media attention concerning EWs to ‘die down’.
NSW suggested interviewing retail staff directly and request copies of training manuals etc. WA will engage a similar approach to the ACT. VIC wishes to firstly establish whether documentation regarding EWs exists and later engage a combination approach i.e. telephone and in-store mystery shopping etc. NT will use a similar approach to VIC.
ACT confirmed they have been analysing representations online and will to [sic] follow up on these representations in-store to establish consistency. Several jurisdictions expressed their concerns regarding mystery shopping that attending one store on one day will not be representative of misrepresentations.
Each jurisdiction’s methods were supported and all agreed to keep the working party updated on any compliance aspects via ACLINK or the QLD team.
Ms Bruton accepted during cross-examination that the minutes record differing views amongst the various jurisdictions about ‘mystery shopping’. However, I note that the last sentence in the passage quoted above indicates that each jurisdiction’s methods were supported, and Ms Bruton in re-examination gave evidence that she noted from subsequent minutes that Western Australia, Northern Territory, Queensland and the ACT all reported that they had conducted ‘mystery shopping’ activities.
In late February or early March 2013, Ms Bruton and Mr Vines prepared an Operation Order in relation to the extended warranties national project. After setting out the objectives of the national project, the Operation Order set out the following instructions:
THE MYSTERY SHOP
In order to identify verbal representations that may not comply with the ACL, Consumer Affairs Victoria (CAV) officers will visit selected traders to make enquiries about extended warranties offered for specific products.
Each team will consist of two people and will be allocated specific stores to visit (see Attachment A). CAV officers will enter the premises posing as prospective customers and will engage a sales assistant to make enquiries as to the application of an extended warranty on a particular product.
A list of possible questions which may be used during this engagement is attached at Attachment B.
Following each trader visit, CAV officers are required to fill out the checklist (see Attachment C) noting the representations made in relation to the extended warranty on offer.
POWERS OF ENTRY
CAV officers will not be exercising any powers of entry. Accordingly, no entry reports will be completed.
This is a covert trader visit, and CAV officers will be required to wear plain clothes for this operation.
Sample questions were provided in the Operation Order. These were:
Sample Questions
Misreps on need for EW
· How does the extended warranty work?
· Do I need an EW?
· Will I have any other protections if I don’t get the EW?
Misreps on existing rights / Misreps on the existence/effect of warranty
· If I don’t get the extended warranty and the product breaks down, what will happen?
· How do they determine whether I get a refund or a repair?
To similar effect, in a media release issued by the Acting Director of CAV in February 2013, the Acting Director had recommended that consumers ask the following question about extended warranties:
In the meantime, consumers considering an extended warranty should ask what it offers above and beyond their existing rights, and decide if it is worth the extra money.
It was Ms Bruton’s standard practice to provide copies of documents such as the Operation Order to her manager. Her manager at the time was Mr Scott Ridout. In her evidence in cross-examination, Ms Bruton said that she did not see it as her decision to conduct the ‘mystery shopping’ exercises, but rather that it was part of the national project plan and an agreed position of the working party. During cross-examination, Ms Bruton accepted that she understood that the ‘mystery shopping’ exercises would involve deception on the part of inspectors towards the shop assistants. She said that she was comfortable with this as it seemed an effective method of obtaining verbal representations that were being made at the point of sale. No legal advice was sought as to whether the proposal to pose as customers was lawful.
On or about 6 March 2013, a meeting took place of CAV inspectors. Present were Ms Bruton, Ms Montero, Ms Lim and Mr Vines. During that meeting Ms Bruton directed each of the other inspectors to conduct ‘mystery shopping’ visits to a number of stores, including four The Good Guys stores, for the purposes of determining what statements sales staff were making about consumer guarantee rights and responsibilities under the Australian Consumer Law, and the extended warranty products sold to consumers by staff at those stores. Ms Bruton instructed the inspectors that the exercise would involve ‘mystery shopping’ visits where inspectors would not disclose to anyone that they were CAV inspectors; and that during these visits the inspectors were to put questions consistent with the sample questions in the Operation Order. The Operation Order required inspectors to complete a check list following the store visit. At this stage, there was no proposal or instruction to secretly record the visits with a digital recorder. Ms Bruton said during cross-examination (reflecting comments she made in an email at the time) that the purpose of the March visits was to see whether there was a problem that warranted investigation, not to collect evidence.
In March 2013, several ‘mystery shopping’ store visits took place as discussed at the meeting on or about 6 March, including to four The Good Guys stores. The First Chadstone Store Visit, which occurred on 7 March, was one of these store visits.
The following account of the First Chadstone Store Visit is based on the affidavits and oral evidence of Ms Bruton and Mr Vines, the CAV inspectors who conducted the store visit. I accept their evidence, as far as it goes. They did not purport to provide evidence of the precise words used during the part of the conversation set out in their affidavits, and their affidavits do not present a complete account of the conversation. (The store visit lasted 10 minutes but only a few sentences are set out in the affidavits.) The CAV inspectors did not obtain the name of the staff member and The Good Guys has been unable to identify him. Mr De Silva, who is the Store Manager of the Chadstone store and has worked there for approximately 5 years, said in his affidavit that he has not been able to ascertain the identity of the staff member, having made all reasonable enquiries.
Before entering the store, Ms Bruton and Mr Vines discussed the product about which they would make inquiries. They agreed to inquire about a television. On entering the store, they walked to the television area of the store. They stood close to and examined a Samsung television.
Shortly after, a male staff member approached them. Ms Bruton and Mr Vines (who were posing as customers) had a conversation with him to the following effect. He said: “Hi, can I help you?” Mr Vines said: “Yes, we’re interested in this TV.” The staff member said: “I’m not from sales. I work in admin and I saw you waiting. There’s no-one around so I’ll help you.” (As he was from the admin area rather than sales, I will refer to him as a staff member rather than as a salesperson.)
The staff member, Mr Vines and Mr Bruton then had a conversation about the features of the Samsung television. Most of the questions were asked by Mr Vines rather than Ms Bruton. They discussed the features and price of the Samsung television and said words to the following effect. Mr Vines said: “What happens if it breaks down?” The staff member said: “The TV comes with a one-year manufacturer’s warranty.” Mr Vines said: “What happens if it breaks down after 13 months?” The staff member said: “There’s nothing we can do for you unless you buy an extended warranty.” Mr Vines said: “What does an extended warranty do?” The staff member said: “After 12 months with no extended warranty, we can’t do anything for you. The extended warranty buys peace of mind.” Mr Vines said: “We will have to think about it.”
During the course of the conversation, neither Mr Vines nor Ms Bruton asked the following sample questions from the Operation Order: “Will I have any other protections if I don’t get the extended warranty?” and “Do I need an extended warranty?”. Nor did they ask what the extended warranty offered above and beyond their existing rights, as suggested in the Acting Director’s media release referred to above.
Prior to the First Chadstone Store Visit, Ms Bruton and Mr Vines had obtained and assessed The Good Guys extended warranty brochure.
By letter dated 22 July 2013, Mr Vines, on behalf of CAV, wrote to The Good Guys expressing concerns about representations being made by staff in relation to extended warranties, and proposing a meeting to discuss these issues. The Good Guys responded by letter (the copy in evidence bears an incorrect date) requesting identification of the relevant stores and the nature of the representations alleged to have been made.
By letter dated 8 August 2013, Mr Vines responded to The Good Guys’ letter. He identified the stores visited and stated that during the visits, the CAV officers did not identify themselves. The letter set out the representations which were said to have been made by sales assistants and stated that these may be misleading. The letter requested certain information from The Good Guys in order to properly address CAV’s concerns. The Good Guys responded by letter (again, the copy in evidence bears an incorrect date). It is not necessary for present purposes to detail the response. It appears that The Good Guys was not prepared to provide the information requested by CAV.
In a memorandum dated 4 September 2013 from Mr Vines to the Strategic Directions Group of CAV, Mr Vines proposed that The Good Guys matter be escalated to the Enforcement & Legal Services branch to co-ordinate and lead ‘mystery shopping’ activities, with the assistance of staff from the Trader Compliance Services branch. He also proposed that the further ‘mystery shopping’ exercises include the use of recording devices to capture evidence of possible false or misleading representations by The Good Guys staff.
In early October 2013, CAV conducted further visits to The Good Guys stores to determine if the non-compliance identified in the earlier ‘mystery shopping’ exercise was continuing. These store visits are not in issue in the proceedings. They were not recorded using a digital recorder.
On 14 October 2013, at a meeting of the Enforcement Committee of CAV attended by Ms Bannon, a decision was made by the then Director of CAV, Ms Claire Noone, that CAV would re-attend The Good Guys stores and record, by a digital recording device, conversations between the CAV officers and The Good Guys staff. At the meeting, the Director said words to the effect that the audio was not for evidence but for engagement with The Good Guys.
On or about 14 October 2013, Ms Bannon instructed Ms Montero to conduct all further compliance assessment visits to The Good Guys stores using a hand held digital voice recorder to record all conversations without disclosing that she was a CAV inspector. Ms Montero informed Ms Bellis of this instruction the next day. Ms Montero and Mr Bellis were the CAV inspectors who conducted the Melton, Nunawading and Geelong store visits at the end of October 2013 that are in issue in the proceedings.
On or about 24 October 2013, a meeting took place between Ms Montero, Ms Lim and Mr Vlahakis. At this meeting, Ms Montero instructed Ms Lim and Mr Vlahakis to conduct compliance assessment visits at two The Good Guys stores. One of these was the Chadstone store. Ms Montero instructed Ms Lim and Mr Vlahakis to record their conversations with the sales staff using a hand held digital voice recorder and not to disclose to those sales staff that they were CAV inspectors.
During the period 25 to 30 October 2013, the Melton store visit, the Nunawading store visit, the Second Chadstone Store Visit and the Geelong store visit that are in issue in the proceedings took place.
On each occasion, the CAV inspectors posed as customers interested in purchasing a television and secretly recorded their conversation with the salesperson using a digital recorder. In conducting the store visits on this basis, the CAV inspectors were following instructions and (I infer) did not consider that they were acting improperly or in contravention of an Australian law. In giving the direction to conduct the ‘mystery shopping’ exercises, Ms Bruton did not consider this to be improper or in contravention of the law. Further, in relation to the decision to secretly record the conversations, there is no evidence to suggest that Ms Noone considered this to be improper or in contravention of the law.
In relation to each of these four store visits, the Director’s evidence included the transcript of the audio file of the store visit. (The respondents also put into evidence the audio files themselves.) Annexed to this judgment, for ease of reference, are extracts from the transcripts of the four store visits. The extracts do not include the parts of the conversations which related to purchasing a television. The extracts include all of the parts of the conversations relied on by the Director in support of the misleading and deceptive conduct case (with the relevant paragraphs of the relevant pleading identified in the left column). Some other relevant parts of the transcript have also been included in the extracts. Where three dots appear in a row in the Annexure, this indicates that a part of the transcript has not been extracted. For the purposes of preparing this judgment I have had regard to the whole of the transcript of each store visit, not only the extracts.
Applicable principles relating to s 138
Section 138 of the Evidence Act provides:
(1)Evidence that was obtained:
(a) improperly or in contravention of an Australian law; or
(b)in consequence of an impropriety or of a contravention of an Australian law;
is not to be admitted unless the desirability of admitting the evidence outweighs the undesirability of admitting evidence that has been obtained in the way in which the evidence was obtained.
(2)Without limiting subsection (1), evidence of an admission that was made during or in consequence of questioning, and evidence obtained in consequence of the admission, is taken to have been obtained improperly if the person conducting the questioning:
(a)did, or omitted to do, an act in the course of the questioning even though he or she knew or ought reasonably to have known that the act or omission was likely to impair substantially the ability of the person being questioned to respond rationally to the questioning; or
(b)made a false statement in the course of the questioning even though he or she knew or ought reasonably to have known that the statement was false and that making the false statement was likely to cause the person who was being questioned to make an admission.
(3)Without limiting the matters that the court may take into account under subsection (1), it is to take into account:
(a)the probative value of the evidence; and
(b)the importance of the evidence in the proceeding; and
(c)the nature of the relevant offence, cause of action or defence and the nature of the subject-matter of the proceeding; and
(d)the gravity of the impropriety or contravention; and
(e)whether the impropriety or contravention was deliberate or reckless; and
(f)whether the impropriety or contravention was contrary to or inconsistent with a right of a person recognised by the International Covenant on Civil and Political Rights; and
(g)whether any other proceeding (whether or not in a court) has been or is likely to be taken in relation to the impropriety or contravention; and
(h)the difficulty (if any) of obtaining the evidence without impropriety or contravention of an Australian law.
The provision applies in both civil and criminal proceedings. It replaces the common law discretion to exclude illegally or improperly obtained evidence discussed by the High Court in Bunning v Cross (1978) 141 CLR 54 and Ridgeway v The Queen (1995) 184 CLR 19 (Ridgeway) but reflects the principles underlying that discretion.
Section 138(1) imposes on the court a two-staged task. At the first stage, the court is to determine whether the evidence was obtained in one of the ways identified in paragraphs (a) or (b) of the subsection. If the court concludes that the evidence was so obtained, then the court is not to admit the evidence “unless the desirability of admitting the evidence outweighs the undesirability of admitting evidence that has been obtained in the way in which the evidence was obtained”. See Parker v Comptroller-General of Customs (2009) 252 ALR 619 (Parker) at [28] per French CJ; Employment Advocate v Williamson (2001) 111 FCR 20 at [78] per Branson J, Kenny J substantially agreeing at [108].
Section 138(1) uses the words “improperly” and “impropriety”: Those words are not defined in the Evidence Act. In Parker, French CJ said (at [29]) that the relevant ordinary meanings of “improper” include “not in accordance with truth, fact, reason or rule; abnormal, irregular; incorrect, inaccurate, erroneous, wrong”. In Employment Advocate v Williamson (2001) 111 FCR 20 at [80], Branson J (Kenny J relevantly substantially agreeing) considered that the words “improper” and “impropriety” in the context of s 138 are to be understood in the sense described by Mason CJ, Deane and Dawson JJ in Ridgeway at 36-37. Their Honours there said:
[T]he Bunning v Cross discretion to exclude illegally procured evidence provides, by analogy, support for the conclusion that the discretion to exclude evidence of an offence or an element of an offence procured by unlawful conduct on the part of law enforcement authorities extends to evidence of an offence or an element of an offence procured by conduct which, while not unlawful, is improper. Thus, in R v Ireland, Barwick CJ made clear that the discretion to exclude evidence on public policy grounds extended to evidence obtained by “unfair” as well as “unlawful” conduct on the part of law enforcement officers. In their judgment in Bunning v Cross, Stephen and Aickin JJ did not qualify their acceptance of Barwick CJ's judgment in Ireland by confining the discretion to a case of unlawful conduct. To the contrary, their Honours plainly accepted that the discretion extended to “unfair … conduct on the part of the authorities”. Their Honours did, however, indicate a preference for the phrase “improper conduct” pointing out that “unfair” is largely meaningless when considering certain types of evidence (eg improperly obtained finger print evidence). In subsequent cases, the words “improper” and “impropriety” have been generally preferred to the words “unfair” and “unfairness” and it has been accepted as established that the Bunning v Cross discretion extends to cases of either unlawful or improper conduct on the part of the authorities.
The effective investigation by the police of some types of criminal activity may necessarily involve subterfuge, deceit and the intentional creation of opportunities for the commission by a suspect of a criminal offence. When those tactics do not involve illegal conduct, their use will ordinarily be legitimate notwithstanding that they are conducive to the commission of a criminal offence by a person believed to be engaged in criminal activity. It is neither practicable nor desirable, to seek to define with precision the borderline between what is acceptable and what is improper in relation to such conduct. The most that can be said is that the stage of impropriety will be reached in the case of conduct which is not illegal only in cases involving a degree of harassment or manipulation which is clearly inconsistent with minimum standards of acceptable police conduct in all the circumstances, including, amongst other things, the nature and extent of any known or suspected existing or threatened criminal activity, the basis and justification of any suspicion, the difficulty of effective investigation or prevention and any imminent danger to the community.
(emphasis added and footnotes omitted)
Section 138(1) refers to “contravention of an Australian law”. “Australian law” is defined in the Dictionary to the Evidence Act as a law of the Commonwealth, a State or a Territory. The word “law” is defined in clause 9 of Part 2 of the Dictionary as follows:
(1)A reference in this Act to a law of the Commonwealth, a State, a Territory or a foreign country is a reference to a law (whether written or unwritten) of or in force in that place.
(2)A reference in this Act to an Australian law is a reference to an Australian law (whether written or unwritten) of or in force in Australia.
In Parker, French CJ said (at [30]) that, without essaying an exhaustive definition, the core meaning of “contravention” involves disobedience of a command expressed in a rule of law which may be statutory or non-statutory; it involves doing that which is forbidden by law or failing to do that which is required by law to be done.
Section 138(2) provides that in certain circumstances, evidence of an admission that was made during or in consequence of questioning is taken to have been obtained improperly. The word “admission” is relevantly defined in the Dictionary to the Evidence Act as meaning a previous representation that is: (a) made by a person who is or becomes a party to a proceeding; and (b) adverse to the person’s interest in the outcome of the proceeding.
If the court concludes that evidence has been obtained improperly or in contravention of an Australian law, or in consequence of an impropriety or of a contravention of an Australian law, the evidence is not to be admitted unless the court is satisfied that the desirability of admitting the evidence outweighs the undesirability of admitting evidence that has been obtained in the way in which the evidence was obtained. In reaching a decision as to whether or not the court is so satisfied, the court is required to take into account each of the matters identified in paragraphs (a)-(h) of s 138(3). However, the opening words of s 138(3) make clear that the court is entitled to take into account, for the purpose of undertaking the balancing exercise required by s 138(1), additional relevant matters.
One of the matters referred to in s 138(3) is the probative value of the evidence. The “probative value” of evidence is defined in the Dictionary to the Evidence Act as meaning the extent to which the evidence could rationally affect the assessment of the probability of the existence of a fact in issue.
In Robinson v Woolworths Ltd (2005) 64 NSWLR 612 (Robinson), the NSW Court of Appeal considered the operation of the same provision of the Evidence Act 1995 (NSW) in circumstances which bear some similarity (but also some differences) to the present case. The case concerned public health legislation which created offences in relation to the supply of tobacco products to persons under 18 years of age. The Department of Health conducted a program of ‘compliance testing’ designed to identify those who would sell cigarettes to persons under the age of 18. Officers of the Department invited young people aged 16 years and under, with their consent and the consent of their parents, to seek to purchase cigarettes from vendors. Pursuant to this program, a young woman aged 16 went into a service station operated by the respondent and purchased a packet of cigarettes. She was accompanied by another young woman, also aged 16. The cashier who sold the cigarettes did not ask for any proof of age. Both of the young women were instructed by officers of the appellant to tell the truth at all times. They were told to tell the truth if they were asked their age, and to say that they did not have identification if they were asked for identification. At least one of the young women received a $10 voucher to spend at a shopping centre, apparently as a reward for her involvement in the compliance program. The retailers approached were selected randomly. There was no suspicion held by the appellant or any of its officers that the respondent, or the cashier who served the young woman, were in the habit of selling cigarettes to underage purchasers.
A judge of the District Court held that the evidence of the offence was improperly obtained because the respondent had, in a real sense, brought about the commission of the offence the subject of the prosecution. The matter came before the Court of Appeal by way of a case stated. The issue before the Court of Appeal was whether the judge was correct in holding that such conduct was “improper” for the purposes of s 138(1) of the Evidence Act 1995 (NSW).
All members of the Court of Appeal held that the evidence had not been improperly obtained. Separate reasons for judgment were delivered by Basten JA, with whose reasons Barr J agreed, and Hall J.
Justice Basten, at [16]-[20], discussed the general law discretion, focussing on Ridgeway. In paragraph [22], his Honour said that it is clear that s 138 varies the relevant common law principles in a number of respects. After noting some of the differences, Basten JA said: “On the other hand, because the Act does not define the concept of impropriety, it is difficult to perceive any necessary intention on the part of the legislature to vary the principles collected in Ridgeway, derived from earlier Australian authority. Accordingly, those principles should be applied”. Basten JA then said at [23]:
It follows that the identification of impropriety requires attention to the following propositions. First, it is necessary to identify what, in a particular context, may be viewed as "the minimum standards which a society such as ours should expect and require of those entrusted with powers of law enforcement". Secondly, the conduct in question must not merely blur or contravene those standards in some minor respect; it must be "quite inconsistent with" or "clearly inconsistent with" those standards. Thirdly, the concepts of "harassment" and "manipulation" suggest some level of encouragement, persuasion or importunity in relation to the commission of an offence: thus, in describing the first category of cases (at 39) the joint judgment in Ridgeway referred to offences being procured or induced.
In paragraph [25], Basten JA referred to the discussion of ‘entrapment’ in R v Sloane (1990) 49 A Crim R 270 and in the judgment of Gaudron J in Ridgeway. In Sloane, Gleeson CJ said at 272-273:
The authorities relied upon in support of the application for a stay of proceedings ... establish that, whatever its precise legal effect may be, the concept of entrapment involves as a necessary element the idea that an accused person has been induced to commit a crime which he or she otherwise would not have committed or would have been unlikely to commit. … A common method of establishing that a person is carrying on an activity of selling goods of a particular kind is to buy some of the goods in question from that person. The specific sale would never have taken place but for the activity of the relevant police officer or informer, but that is not sufficient to constitute a case of entrapment. …
Justice Basten noted (at [27]) that Gaudron J in Ridgeway adopted a similar distinction between the mere provision of an opportunity to commit a crime and inducement to commit a crime. Gaudron J said at 77:
In cases of “mere opportunity”, the accused person is fairly regarded as wholly responsible for his own actions. And that is so even if there is some illegality associated with the opportunity provided, as, for example, that involved in the purchase of contraband where it is clear that it is generally available to all who wish to purchase it. But in cases which go beyond the provision of mere opportunity, where the offence results from the illegal actions of those whose duty it is to uphold the law, it is they who, in a real sense, are responsible for its commission, not the accused. In such circumstances the accused and society in general may well view prosecution as a serious injustice.
Justice Basten then considered a number of cases from other common law jurisdictions dealing with similar issues. He noted (at [29]) that the test identified by Lord Bingham of Cornhill CJ in Nottingham City Council v Amin [2000] 1 WLR 1071 at 1076-1077 is in terms which bear a close similarly to the language found in Ridgeway. His Lordship stated:
It seems to me that the court has adopted a fairly consistent line. On the one hand it has been recognised as deeply offensive to ordinary notions of fairness if a defendant were to be convicted and punished for committing a crime which he only committed because he had been incited, instigated, persuaded, pressurised or wheedled into committing it by a law enforcement officer. On the other hand, it has been recognised that law enforcement agencies have a general duty to the public to enforce the law and it has been regarded as unobjectionable if a law enforcement officer gives a defendant an opportunity to break the law, of which the defendant freely takes advantage, in circumstances where it appears that the defendant would have behaved in the same way if the opportunity had been offered by anyone else.
Following the discussion of those cases, Basten JA said at [36]-[37]:
[36]These principles should inform the determination of a court as to what constitutes "improperly" obtained evidence or "impropriety" for the purposes of s 138. In circumstances where there is no unlawfulness on the part of any law enforcement officer, mere doubts about the desirability or appropriateness of particular conduct will not be sufficient to demonstrate impropriety.
[37]Before leaving these broad principles, it is necessary to note the indeterminacy of the test identified by reference to inconsistency with "the minimum standards which a society such as ours should expect and require of those entrusted with powers of law enforcement": Ridgeway at 36. Such a test invites assertion and counter-assertion, with no objective touchstone to assist in deciding which to accept and which to reject. It is at least doubtful whether a majority of the Australian community would have shared the High Court's view of the “entrapment” of Mr Ridgeway: see for example, the comments of McHugh J (at 85). The answer is not necessarily to eschew the task, but to establish, in advance, standards of conduct against which a claim of impropriety can be assessed. Where no relevant pre-existing standard has been breached, it should be a rare case in which impropriety would lead to exclusion. (Of course, standards may themselves require scrutiny, but no relevant standard was identified in the present case.) And the test of such a case must involve judicial appraisal of all potentially relevant public policy considerations, being the task actually undertaken in Ridgeway. Appeals to “community standards” will tend to substitute subjective reactions for careful analysis, albeit of ill-defined concepts.
Application of principles to the present case
Was the evidence obtained improperly or in contravention of an Australian law?
The respondents contended that the CAV inspectors acted beyond power when they entered the stores and asked questions posing as customers and (where applicable) in secretly recording the conversation. Further, they contended that the evidence was obtained through trespass and the unlawful invasion of the salesperson’s right to privacy in contravention of s 38 of the Charter. They argued that, as a consequence, the evidence was obtained improperly or in contravention of an Australian law, or in consequence of an impropriety or a contravention of an Australian law. Further or in the alternative, the respondents submitted that the statements made by the salespeople were admissions and are taken to have been improperly obtained by virtue of s 138(2)(b) of the Evidence Act. Each of these contentions will be considered in turn. I note that it was not suggested by the respondents that it was otherwise contrary to law for the CAV inspectors to secretly record the conversations.
Did the CAV inspectors act beyond power?
The respondents’ first contention was that the CAV inspectors acted beyond power when they entered the stores and asked questions posing as customers and in secretly recording the conversations. It was submitted that statutory authority was necessary to do those acts, and none existed. Further or alternatively, it was contended that the scheme of the Victorian Act, in particular Part 6.4, excluded such powers by necessary implication. (It was not contended by the Director that the inspectors were exercising powers under Part 6.4, other than s 152, when they conducted the store visits.)
In support of the argument that statutory authority was needed, the respondents relied on the principle expressed in Aronson and Groves, Judicial Review of Administrative Action (5th ed, Lawbook Co, 2013) at [6.290]:
Professor Sampford gave a concise methodological distinction between the basic attributes of public and private law. They included:
There are different “closure rules” for public and private law. Such closure rules determine what should be done if there is no appropriate rule to cover a case. In public law the rule is “what is not authorised is not permitted” and in private law it is that “what is not prohibited is permitted”.
In accordance with public law’s closure rule, there are many judicial review cases in which the ground is, quite simply, that the impugned decision-maker lacked the necessary power. Some of them turn on fine questions of statutory interpretation, whilst others are more obvious.
(footnotes omitted)
The respondents contended that, if and to the extent that the Director relied on the powers conferred on the Director by s 110 of the Victorian Act, those powers required a delegation pursuant to s 111 and no delegation had occurred here. (It was not contended by the Director that there had been any relevant delegation pursuant to s 111.)
In support of the argument that the scheme of the Victorian Act, in particular Part 6.4, excludes such powers by necessary implication, the respondents drew attention to the entry and search power in s 152, which provides:
An inspector may enter and inspect any part of a premises that is, at the time of the entry and inspection, open to the public.
The respondents contrasted that section to the corresponding section in earlier legislation, namely s 120 of the Fair Trading Act 1999 (Vic), which read:
An inspector may do either or both of the following –
(a)enter and inspect any part of a premises which is, at the time of the entry and inspection, open to the public;
(b)purchase goods or services at such a premises at such a time and at such a price at which it is available to the public to purchase.
The respondents also drew attention to s 170 of the Victorian Act (also contained within Part 6.4), which deals with the privilege against self-incrimination. That section provides:
(1)It is a reasonable excuse for a natural person to refuse or fail to give information or do any other thing that the person is required to do by or under this Part, if the giving of the information or the doing of that other thing would tend to incriminate the person.
(2)Despite subsection (1), it is not a reasonable excuse for a natural person to refuse or fail to produce a document that the person is required to produce by or under this Part, if the production of the document would tend to incriminate the person.
It was submitted on behalf of the respondents that it would be incongruous, in light of s 152, which provides a power to enter premises open to the public without consent for the purposes of inspection, if a power was available to enter premises open to the public without consent for other purposes, in particular, to ask questions posing as customers and to secretly record the conversations. The respondents also submitted that it would be incongruous, in light of the preservation of the privilege against self-incrimination in s 170, if an individual could be exposed to the danger of self-incrimination through covert deception.
In paragraph 18(d) of the pleading, the Director alleges that, by the relevant conduct, The Good Guys engaged in misleading and deceptive conduct by representing that if a customer buys a television from The Good Guys, but does not also buy the extended warranty product, then there is nothing that The Good Guys can do to assist the customer if the television breaks down after 12 months of the purchase, whereas under the consumer guarantees and related remedies in the Australian Consumer Law, The Good Guys does have an obligation, in certain circumstances, to pay a refund or provide a replacement television to a customer whose television has or develops a major failure more than 12 months after the purchase. I do not think that The Good Guys made the representation or engaged in misleading and deceptive conduct (or conduct likely to mislead or deceive) as alleged. I accept that, taken in isolation, the salesperson’s statement that, if the customer does not obtain the extended warranty and the television breaks down at 12 months and 1 day, then The Good Guys cannot help the customer, was incorrect because it failed to refer to the obligations of The Good Guys as supplier under the consumer guarantees and related remedies in the Australian Consumer Law. But it is necessary to consider the statement in the context of the conversation and circumstances as a whole. During the course of the conversation, the salesperson wrote his name and phone number on the extended warranty brochure and handed it to Mr Bellis. He also said, “have a read through the booklet”. This was a reference to the extended warranty brochure. As discussed above, the extended warranty brochure contained a description of the consumer guarantees and related remedies in the Australian Consumer Law.
In paragraph 18(e) of the pleading, the Director alleges that, by the relevant conduct, The Good Guys engaged in misleading and deceptive conduct by representing (expressly or impliedly) that the extended warranty is the only way a customer would have any remedy or rights if his or her television breaks down after 12 months of the purchase, whereas a customer also has rights and remedies under the consumer guarantees and related remedies in the Australian Consumer Law. For substantially the same reasons as those set out above in relation to the preceding allegation, in my view The Good Guys did not make the alleged representation, or engage in misleading or deceptive conduct (or conduct likely to mislead or deceive) as alleged. Again, it is necessary to consider the statements made by the salesperson in the context of the conversation and circumstances as a whole. These include the fact that the salesperson handed Mr Bellis the brochure and said “have a read through the booklet”.
In paragraph 18(f) of the pleading, the Director alleges that, by the relevant conduct, The Good Guys engaged in misleading and deceptive conduct because, in the context of purporting to inform and explain to potential customers their rights in the event of a breakdown or defect in the goods offered for sale by The Good Guys, the failure to refer to the matters set out in paragraphs 17(a) to (c) of the pleading was conduct that was likely to lead potential customers into error. In my view, the conduct of The Good Guys was not misleading or deceptive (or likely to mislead or deceive) as alleged. First, to the extent that this allegation relies on the salesperson having made the statements set out in paragraphs 16(c), (d) and (e) of the pleading (which were inaccurate or incorrect if taken in isolation), these statements need to be considered in the context of the conversation and the circumstances as a whole. These include the fact that, as discussed above, during the course of the conversation, the salesperson wrote his name and phone number on the extended warranty brochure and handed it to Mr Bellis, and said “have a read through the booklet”. Secondly, the course of conduct included the fact that The Good Guys made the extended warranty brochure available to customers in the store, and this provided a description of the consumer guarantees and related remedies in the Australian Consumer Law.
The Director alleges that the matters pleaded in paragraphs 18(a)-(e) were representations with respect to future matters and relies on s 4 of the Australian Consumer Law. For the reasons given above, I have concluded that the representations alleged in those paragraphs were not made.
For these reasons, in my view The Good Guys did not engage in misleading and deceptive conduct as alleged in relation to the Geelong store visit. For the same reasons, The Good Guys did not make false or misleading representations as alleged in paragraph 19 of the pleading.
Other issues relating to all five store visits
One of the arguments raised by the respondents was that, because the CAV inspectors who conducted the store visits were conversant with the consumer guarantee rights and remedies in the Australian Consumer Law, they were not misled or deceived (or likely to be so), hence the conduct was not misleading or deceptive or likely to mislead or deceive. The respondents submitted that where impugned conduct is directed at the public or a section of the public, the characterisation (as to whether the conduct is misleading or deceptive or likely to be so) may be undertaken by reference to a hypothetical individual isolated by some criterion as a representative member of the public or section of the public; but where the conduct is directed at an individual, the question is whether the conduct has a tendency to lead that individual into error. The respondents relied on Campbell v Backoffice Investments Pty Ltd (2009) 238 CLR 304 at [25]-[29] per French CJ. For the following reasons, I consider that the question of characterisation in the present case is to be approached without regard to the fact that the CAV inspectors were conversant with the consumer guarantees. First, as emphasised by French CJ in Campbell at [24], the question of characterisation (as to whether conduct is misleading or deceptive or likely to be so) is logically anterior to, and separate from, the question whether a person has suffered loss or damage. Secondly, the matter is to be considered in the context of the circumstances of the particular case and the remedy sought: see Campomar Sociedad, Limitada v Nike International Limited (2000) 202 CLR 45 at [99] and [101] per Gleeson CJ, Gaudron, McHugh, Gummow, Kirby, Hayne and Callinan JJ. In circumstances where a private party seeks damages based on alleged misleading and deceptive conduct directed towards individuals, it will be necessary to consider the effect of the conduct on the individuals. But it does not follow that in all cases involving conduct directed to individuals, it is necessary to consider the effect of the conduct on them. In the present case, the Director primarily seeks declarations; he does not seek damages. Thirdly, as noted by McHugh J in Butcher v Lachlan Elder Realty Pty Ltd (2004) 218 CLR 592 at [112], the words “or is likely to mislead or deceive” were inserted into s 52(1) of the Trade Practices Act 1974 (Cth) by amendment in 1977. He continued:
Those words make it clear that it is unnecessary to prove that the conduct in question actually deceived or misled anyone. The amendment expands the scope of s 52 and makes it, in the oft-quoted words of Fox J in Brown, "a comprehensive provision of wide impact". The section establishes a norm of conduct with which corporations must comply. The failure by a corporation to observe that norm of conduct has the consequences provided for in Pt VI of the Act.
(footnotes omitted)
Although McHugh J was in dissent in Butcher, these comments express generally accepted principles, and another passage from his judgment in Butcher was quoted with approval by Gummow, Hayne, Heydon and Kiefel JJ in Campbell, as set out in paragraph [150] above. These considerations support the view that, in a context such as this, the task of characterisation is to be approached by reference to the impugned conduct and it is not to the point that the CAV inspectors were conversant with the consumer guarantees and related remedies.
Another argument raised by the respondents was that the conduct in question was not “in trade or commerce” because the CAV inspectors attended the stores in their capacity as investigating officers rather than consumers; hence there was no potential or actual trading or commercial relationship. The respondents relied on (among other cases) Concrete Constructions (NSW) Pty Limited v Nelson (1990) 169 CLR 594 at 602-604 and Street v Luna Park Sydney Pty Ltd (2009) 223 FLR 245 at [215]. In my view the conduct of The Good Guys bore a trading or commercial character as it formed part of the promotion for sale of goods and extended warranties for goods. The fact that the CAV inspectors were posing as consumers and did not intend to trade does not deprive it of this character. Although I do not find it necessary to rely on this, I note that the definition of “trade and commerce” in s 2 of the Australian Consumer Law provides that the expression includes “any business … activity”.
G. CONCLUSION
For the reasons set out above, I have concluded that The Good Guys did not engage in misleading and deceptive conduct, or conduct likely to mislead or deceive, in relation to any of the five store visits. Accordingly, in each proceeding there will be an order that the proceeding be dismissed.
In relation to costs, I propose to give each party the opportunity to file a short written submission, given that some of the time during the trial was devoted to the respondents’ objections to evidence based on s 138 of the Evidence Act, which were determined adversely to the respondents.
I certify that the preceding two hundred and fourteen (214) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Moshinsky. Associate:
Dated: 3 February 2016
ANNEXURE
EXTRACTS FROM TRANSCRIPTS OF STORE VISITS
(1) Melton store visit
Pleading paragraph (VID 507 of 2014) Transcript … 21(a) GARY: Well, if you’re looking at a 55 and you want 3D, that would be the one I’d recommend.
MR BELLIS: So what does that come with 12-month warranty?
GARY: 12 months, they’re all 12 months.
MR BELLIS: Everything is 12 months.
GARY: You can extend it out, I would advise doing it.
MR BELLIS: You would?
GARY: Yes, for the simple reason, the only thing that really goes wrong with these is the power source. The part is $350, labour to put it in is another $250.
MR BELIS: Okay.
GARY: Okay.
MR BELLIS: So if you get the warranty then - - -
GARY: Yep, you’d be covered. Because our warranty also covers wear and tear.
MR BELLIS: Okay.
… 21(b) and 21(c) MR BELLIS: Good on the energy too. So what happens if I – if you don’t get the warranty.
GARY: Yep.
MR BELLIS: And you get a problem.
GARY: Yep.
MR BELLIS: Are we in trouble?
GARY: Basically yes.
MR BELLIS: Okay, so with the first – with the manufacturer’s warranty, we just – do we call you or you call them or?
GARY: No, you call them.
MR BELLIS: Okay.
GARY: And they’ll come out to you.
MR BELLIS: Yeah, and so after that, if we don’t get the warranty, and we’ve got a major problem we’re in trouble.
GARY: You have got a major problem.
MS MONTERO: If we have a major problem, we have a major problem, okay.
GARY: That’s about it. Excuse me major, but we’ve got a problem.
MR BELLIS: Yeah, sure. So you wouldn’t be able to - - -
GARY: You can’t (indistinct).
MR BELLIS: I’ve been burnt before, that’s why I want to ask.
GARY: No, no - - -
MS MONTERO: So you can’t buy the warranty afterwards?
GARY: No.
MS MONTERO: So, no, you have to buy it at the same time.
GARY: Yes. To sell a warranty halfway through the thing, you have to be insurance brokers and we’re not.
MS MONTERO: Okay.
… GARY: That would be probably one of the Samsungs I’d recommend (indistinct)
MR BELLIS: Yep. I guess no-one does refunds.
GARY: They do have the – their top of the range one, but that’s just on three grand.
MR BELLIS: Yeah, okay, that’s probably a bit much.
GARY: At the moment, value for money.
MR BELLIS: It’s a lot of money, if we don’t get the extended warranty, isn’t it?
GARY: Well, look, to be brutally honest, I never used to buy an extended warranty, then my washing machine tried to kill me - - -
MS MONTERO: How does a washing machine try to kill you?
GARY: The arm broke in the spin cycle when it was doing 1800 revs, and threw the barrel outside the front of the washing machine.
MS MONTERO: Wow, okay.
MR BELLIS: I’d want a refund in that circumstance.
GARY: I was down there washing the dog, washing machine is there, rattle, rattle, rattle. What the hell.
MS MONTERO: Dog survived as well?
GARY: Dog was up there. Dripping wet and she just went (indistinct)
MS MONTERO: And never wanted a bath again.
GARY: No. She wasn’t a very happy little dog for a while after that.
21(d) MR BELLIS: Does anyone do refunds any more? It seems like everyone just - - -
GARY: Nup.
MR BELLIS: - - - people just replace stuff.
GARY: Yep. Give me a sec.
… 21(b) and 21(e) MR BELLIS: So if we get the warranty, do we call you guys or we just call them if there’s an issue?
GARY: The first year you still phone Samsung, after that, on this thing, phone number, you phone them, they’ll do everything for you.
MR BELLIS: Okay.
GARY: You do not have to take the TV anywhere, you do not have to do anything, they will do it all for you.
MR BELLIS: Okay.
GARY: If they cannot fix it, you get a new TV, not a refurbished TV.
MS MONTERO: Okay.
GARY: And it will be the latest model. They don’t go out trying to outsource something that’s 12-18 months old.
MR BELLIS: Okay.
GARY: They don’t do it.
MR BELLIS: So you can get an upgrade, that’s - - -
GARY: Well, basically, yeah.
MR BELLIS: If something goes wrong, sure. All right. Want to think about it?
MS MONTERO: It’s up to you.
MR BELLIS: Yeah, no, we need to have a bit of a think about it.
GARY: Not a problem
…
(2) Nunawading Store Visit
Pleading paragraph
(VID 507 of 2014)Transcript … MR BELLIS: Yeah, before the smart phones. So they’re all – do they both – I guess everything is 12-month warranty and all that sort of stuff these days.
YASMAN: Correct, yes.
MR BELLIS: So, okay.
MS MONTERO: Is it worth getting the extended warranty then?
YASMAN: Look, I’d say another year or two is a good idea to have. Three or four years, that’s your decision, if you want to take it up that further.
28(a) MR BELLIS: So what happens if, like in the first 12 months if it breaks.
YASMAN: If it goes bung in the first 12 months, Samsung covers you.
MR BELLIS: Okay.
YASMAN: So they come to your house, they’ll assess the TV. If they can fix it, they will, if they can’t, they’ll give you a brand new TV.
28(b) and (c) MR BELLIS: What about after 12 months, if we don’t get the - - -
YASMAN: You’re in trouble. You’re up poo creek.
28(c) and 28(d) MR BELLIS: Oh really.
YASMAN: Look, you can probably – with an item that’s about two grand, you can take it through to Consumer Affairs, that’s again, if you want to do that. It can take up to between three and nine months to get a resolution from it. Generally you will probably get warranty on it, but it’s putting up with the TV for between let’s say three to nine months, of that resolution period, whether you can do without your tele.
MR BELLIS: What will they do?
YASMAN: They’ll probably say, “Look, you are covered in warranty,” - - -
MR BELLIS: Yep.
YASMAN: And make Samsung come to your house and fix it.
MR BELLIS: Oh, okay.
YASMAN: So.
MR BELLIS: Oh, even after the 12 months.
YASMAN: Correct. And if they can’t fix it, they say, “all right, well you’ve used it for let’s say 15 months or 18 months” - - -
MR BELLIS: Yep.
YASMAN: The pro rata is maybe Samsung (indistinct) 500 or 600 bucks and they could give that to you and you put it towards your next TV.
MR BELLIS: Yep.
YASMAN: That’s the whole issue if you don’t have the warranty.
MR BELLIS: But I’ve got to deal – I’d have to deal with them, not you guys.
YASMAN: Correct.
MS MONTERO: With Samsung or Consumer Affairs?
YASMAN: Consumer Affairs first, and they deal directly with Samsung.
MR BELLIS: Okay.
MS MONTERO: Okay.
YASMAN: So again, it depends how much you pay, if you paid $500 for a TV and it goes bung after 15 months - - -
MR BELLIS: Cause I’ve been burnt in the past, that’s why I’m asking.
YASMAN: Don’t be surprised if they say “look, you’re not covered.”
MR BELLIS: Yep.
YASMAN: For a TV that’s let’s say, 2, 2-3, and it fails after 18 months, there is an implied warranty there as well, but it’s up to yourself to pursue that, they’re not going to offer that to you. Samsung is going to say, “Look, you’re not covered.” Then you have to write a letter, it goes to them, they contact Samsung, then they say, “all right, we’ll work for a resolution, the customer is covered for $500,” and you go, well that’s not good enough, so it’s just backwards and forwards. But there is an implied thing, but you have to follow that up.
MR BELLIS: Yeah, okay.
YASMAN: You know.
28(e) MR BELLIS: What about refunds, do you do – like if, because this is what happened to me previously, it wasn’t with Good Guys.
YASMAN: Yep.
MR BELLIS: Like I had an older Sony, and you know how you get the lines that come through here.
YASMAN: Yep, they’re pixels.
MR BELLIS: It was screwed, but I asked for a refund and they wouldn’t give me a refund.
YASMAN: Yeah, they won’t give you a refund.
MS MONTERO: So Good Guys don’t give refunds.
YASMAN: It’s not us.
MS MONTERO: Oh okay.
YASMAN: So the warranty, even if you sort of go ahead - - -
MS MONTERO: (indistinct)
YASMAN: Sorry, even if you go ahead with this, it goes to a separate company.
MR BELLIS: Yeah, okay.
YASMAN: That’s – we’re the only ones that have an exclusive to that, so basically what our warranty implies, let’s say forget it, let’s say you buy it, it goes past the first year, you buy an extra two years, it goes bung after let’s say 26 months. They’ll assess it. So we’ll come to your house and we’ll have a look at the tele.
MR BELLIS: Yep.
YASMAN: If it’s the screen, generally that’s the most expensive part to fix.
MR BELLIS: (indistinct) yeah.
YASMAN: So we can say, “all right, well to order it and put it in, might cost this much”.
MR BELLIS: Yep.
YASMAN: They say, well it’s not really worth it, replace the tele. So what happens in that case, you get a brand new TV. If it’s something they can’t fix, you get a brand new TV. If it’s a problem that’s occurred more than three times, they’ll replace the TV for you. So that’s our warranty, so it’s sort of like, it’s watertight, it protects you, for in-home service and any major fault that’s with the TV.
MR BELLIS: Yep.
YASMAN: If it can’t be fixed, it’s replaced new for old.
28(f) MS MONTERO: That’s only if you get the extended warranty?
YASMAN: Correct. But if you don’t have the warranty, we can’t do anything, because it’s up to them to give us a credit. If they say to us, “we’re not going to give you a credit, then we can’t give you any money back, because then we’re out of pocket.”
MR BELLIS: But if they do - - -
YASMAN: But again, it’s up to yourself to deal with them.
MR BELLIS: Yeah.
YASMAN: I mean we can deal with them for you, we can send out an email.
MR BELLIS: Yeah.
YASMAN: Then they’ll say, “look, get the customer to contact us,” and then they deal directly with you. The first two weeks, we’re allowed to swap it in store, after that it’s basically – we’re happy to call Samsung for you, get them out to your house, but it’s basically Samsung’s warranty thereafter.
MS MONTERO: So do we – like during the first 12 months though, do we have to call Good Guys if there’s a problem, or do we just ring Samsung?
YASMAN: You can do whatever – you can call us, we’ll call for you, or you can call Samsung directly yourself.
MS MONTERO: Okay.
YASMAN: So we’re happy to help either way. Even after the warranty, even if you’ve taken it, if it’s expired, we’re happy to help.
MS MONTERO: So there’s still a bit of customer service there?
YASMAN: Oh absolutely, absolutely – we’re here – as I said, you can just give us a call and say, “look, the Samsung is faulty, that’s my docket number,” terrific, we take the details and we get onto it for you, you know.
MS MONTERO: Okay.
YASMAN: So we – that’s part and parcel of what we offer if you buy stuff from us, so.
…
(3) First Chadstone Store Visit
No Transcript
(4) Second Chadstone Store Visit
Pleading paragraph
(VID 507 of 2014)Transcript … MR VLAHAKIS: Does this come with a warranty?
SUNIL: Yeah.
MR VLAHAKIS: Yeah.
SUNIL: It comes with one year – it comes with one year warranty.
MR VLAHAKIS: One year.
MS LIM: Is that a manufacturer warranty or?
SUNIL: You can extend it. It’s pretty cheap to extend it. I think it’s about $500 for three-four years.
MR VLAHAKIS: Extension.
MS LIM: Is that for both, or just this one?
SUNIL: No, for this one. This one here is 229.
MR VLAHAKIS: So it comes with a 12-month warranty.
SUNIL: Yeah, it comes with 12 months.
MR VLAHAKIS: The Sharpe one.
SUNIL: But for instance, a big TV, we strongly recommend that you know, extend it.
MS LIM: Okay.
SUNIL: But up to you.
… MR VLAHAKIS: Okay, so it definitely comes with a 12-month warranty.
SUNIL: Definite.
MR VLAHAKIS: Yeah.
MS LIM: Okay.
MR VLAHAKIS: Is that with Sharpe or with you guys?
SUNIL: No, no, with Sharpe.
MR VLAHAKIS: With Sharpe, okay.
SUNIL: With Sharpe.
MS LIM: So if there’s any problems that we have in the first 12 months, say like the fifth month or something there’s a line, or some burn spot - - -
SUNIL: They replace it.
MS LIM: You replace it?
SUNIL: They replace it, straightaway.
MS LIM: Okay.
SUNIL: That’s why I said, the warranty is very very important, because they just replace it straightaway. Any - - -
MS LIM: Are you talking about the extended or?
SUNIL: Any, any, any warranty, nowadays, ACCC is very strong. They have said a warranty means – like it’s on sight, so you know when you see something here.
MS LIM: Yeah.
SUNIL: You just call them, and somebody comes there, and they go, “Oh okay,” and they assess it.
MR VLAHAKIS: Yeah.
SUNIL: And if they can’t fix it on the spot, they replace it.
MR VLAHAKIS: Replace it.
MS LIM: Okay.
MR VLAHAKIS: I got one of my friends, because he recently bought a TV, it was only a few months old, had a massive line go through the middle. He wanted a refund, but they wouldn’t give it to him.
41(a) MS LIM: Do you guys offer, like if say there’s a real big problem within the first 12 months, do you guys offer a refund or repair?
SUNIL: Not refund, no, no, refund. Say after one month - - -
MS LIM: After one month.
SUNIL: - - - offer a refund. But they will swap it for another one.
MS LIM: Okay.
SUNIL: You know, which is fair enough.
MS LIM: Yes.
SUNIL: Because refund is – see because – see how it works is, this Sharpe owns it right. So if Sharpe is happy to take it back and give the money back, we’ll do it.
MS LIM: Okay.
MR VLAHAKIS: Okay.
SUNIL: But if they won’t, they’ll say, “No, I can give you a brand new TV, which is fine.”
MS LIM: Instead.
41(b) SUNIL: Because see, after, let’s say after a year and half, something goes wrong.
MR VLAHAKIS: Yeah.
SUNIL: They replace the TV, it will be a brand new one, with new technology, you know.
MR VLAHAKIS: Okay. That’s if we get extended warranty.
SUNIL: That is if you get it but if you’re not under warranty, then that’s it.
41(c) MR VLAHAKIS: You said something, if it breaks down within a month we can get a refund.
SUNIL: Of course.
MR VLAHAKIS: But anything after that.
SUNIL: Refund, replace, whatever - - -
MR VLAHAKIS: Within a month.
MS LIM: Okay.
SUNIL: Yeah.
MR VLAHAKIS: But anything after that.
SUNIL: After that they just replace, they don’t refund.
MR VLAHAKIS: Yeah.
SUNIL: Which is everywhere – anywhere in Australia.
41(d) MS LIM: So after 13 months, sorry, yeah, so after 12 months – like 13 months or 15 months, if I don’t take the extended warranty, and something happens to the TV, what options do I have?
SUNIL: Yeah, well you can call up somebody and you know - - -
MS LIM: When you say somebody, you mean here or?
SUNIL: No, no, no.
MS LIM: Call Sharpe?
SUNIL: No, any – not Sharpe.
MS LIM: Any repair man.
SUNIL: Sharpe will screw your happiness – excuse my French.
MR VLAHAKIS: Yeah.
SUNIL: Sharpe will rip you apart.
MS LIM: Really.
SUNIL: Oh yeah, they charge some $300 an hour or something. But you can go to a normal repair man.
MS LIM: Yes.
SUNIL: And take a quote, but to give a quote, they will probably charge you about $100, and after that they tell you what the repairs will be. This is expensive. You think this is a non (indistinct) LED backlit.
MS LIM: Okay.
SUNIL: To replace it’s horrendously expensive.
MR VLAHAKIS: So if we have someone look at it, and then they say you need to replace a panel or something, we have to pay for it ourselves afterwards.
SUNIL: Yeah.
MR VLAHAKIS: That’s if we don’t get extended warranty.
SUNIL: 2000 bucks.
MR VLAHAKIS: Out of our own pocket.
SUNIL: Check it.
MR VLAHAKIS: Okay.
SUNIL: Check it, I’m not saying, I’m not scaring you or anything, check it, check it with – just go on Google and say “replacing 70 (indistinct) panel”.
MR VLAHAKIS: Yep. So you think we should get the extended warranty?
SUNIL: Yeah.
MR VLAHAKIS: Yeah.
SUNIL: It’s 200 bucks, it’s ridiculously cheap.
MS LIM: So 200 over per year or?
SUNIL: It’s not even 200 a - - -
MS LIM: Two years. Two years.
MR VLAHAKIS: 209 for two years.
SUNIL: This is for three years, for three years.
MS LIM: Okay.
MR VLAHAKIS: Because I don’t want to pay 2, 3 grand out of my own pocket after a year.
SUNIL: Ridiculous (indistinct) in this country, I don’t know (indistinct) have you guys seen the (indistinct) I come from Asia – from India.
MR VLAHAKIS: Yeah.
SUNIL: In India you can (indistinct) fix it, they get all this stuff, and they do something.
MS LIM: It’s not like that here.
SUNIL: Are you kidding. They’re (indistinct) like a laptop goes off - - -
MR VLAHAKIS: That’s the last thing, like, we don’t want to pay three grand, and then within – after a year and half pay another three grand just to replace.
SUNIL: Something like this – that’s why I’m stressing. If you bought a 22 inch, I couldn’t be bothered - - -
MS LIM: So an expensive nice one - - -
SUNIL: 100 bucks okay. I will still think for 100 bucks, you only pay 20 bucks for warranty, but I will still say – sorry.
MS LIM: Sorry, Sunil, was it. Sunil, so how does the – okay, so how does this extended warranty work. Like so if we pay the 200, 209, on top of the 2928, how does it work?
SUNIL: Then it’s covered.
MS LIM: So if there’s any problems - - -
SUNIL: You just call that phone number.
MS LIM: Yep.
SUNIL: Just call that phone number.
MS LIM: Okay.
SUNIL: It’s a 24-hour phone number.
MS LIM: Okay.
SUNIL: Let’s say for example you call at 5 o’clock in the evening.
MS LIM: Yep.
SUNIL: Somebody will come the next morning and they will (indistinct) you have two or three pixels (indistinct) you know what’s a pixel?
MS LIM: Yep.
SUNIL: Dark dots coming through.
MR VLAHAKIS: Yeah, yeah.
SUNIL: Sometimes you will notice it. Come in and you see dark (indistinct). They replace the panel.
MR VLAHAKIS: Okay.
MS LIM: Okay, and I don’t have to pay anything, because I’ve already paid for it.
SUNIL: Not even excess. Like in insurance you pay excess, right.
MS LIM: Yep, yep.
SUNIL: 500 bucks.
MR VLAHAKIS: Yeah.
SUNIL: Nothing.
MS LIM: Okay.
MR VLAHAKIS: I think it’s better if we probably go extended warranty.
SUNIL: You can even call every day. Every day service, every – any day, any time. Sound. You know, any port - - -
MS LIM: Any problem, they will - - -
SUNIL: Port – HDMI plug in not working, what, call them up. They’ll come – “oh, it’s working,” okay, fine mate. Go.
MR VLAHAKIS: What’s the maximum – how many years extended warranty we get? Up to how much?
SUNIL: Maximum for this TV – they don’t go too many years, they don’t (indistinct).
MR VLAHAKIS: Yeah.
SUNIL: Because then the wear and tear kicks in - - -
MS LIM: So 209 to be completely safe over the next two – so on top of the 12 months, then after that it kicks in, right. Yep.
SUNIL: It’s only extended til three years.
MR VLAHAKIS: Three years is the maximum we can get extended warranty.
SUNIL: They won’t, they’re not happy to give it, because it’s a co-ordination between Good Guys and Sharpe.
MS LIM: Okay.
SUNIL: Because we have to use Sharpe parts, all original.
MR VLAHAKIS: Yeah.
MS LIM: Okay.
SUNIL: Something goes wrong - - -
MR VLAHAKIS: So basically after 12 months, if we don’t get extended warranty we’re on our own.
MS LIM: Is that, is that - - -
SUNIL: Pretty much.
SUNIL: I’m not saying – look, I’m not saying something will go wrong, but anything, a remote, something as stupid as the remote, you know. What do you do, you throw it away, you’ll go and get a universal remote. What for – pay for the extend to replace it. A Sharpe remote would cost you 150 bucks (indistinct)
MS LIM: Do you recommend Sharpe over the other brands?
…
(5) Geelong store visit
Pleading paragraph (VID 508 of 2014) Transcript … MR BELLIS: Yeah, okay. And they’re all, they all just got like a 12-month manufacturer’s warranty?
MARK: Yeah, all have a 12-month warranty. That’s my uncle, that guy. That guy was my uncle.
MS MONTERO: Okay.
MARK: Who I sold the TV to.
MR BELLIS: Oh okay, yeah.
MARK: He’s got basically this TV, but the next model up, okay.
MR BELLIS: Okay, yep.
MARK: That was about five grand. The big thing is, is with the next model up, it’s got more pixels in it, so he’s future-proofing himself, okay. The picture was a little bit sharper.
MR BELLIS: Yeah, okay.
MARK: And I said this to him as well, for the extra two grand, you probably won’t see that much difference and he goes, “I want the best. I want to future-proof myself. I only buy TVs once every five years.” Okay. The big thing is, is TVs do not last as long as they used to.
MR BELLIS: Okay.
MARK: Okay. Yes, it does come with a 12-month warranty.
MR BELLIS: Yep.
… MR BELLIS: Yep. No, that’s all right, we’re just sort of looking and asking questions and – so what happens with – how does the warranty work.
MARK: Okay.
16(a) MR BELLIS: Like, if, what happens if it, you know completely busts.
MARK: Yep, if they cannot fix it, they have to give you a new one.
MR BELLIS: Okay.
MARK: Keep in mind, if you made it into a five-year warranty, okay, and it broke down at say 4 years old – can you just give me two seconds. Ian, when you’ve got everything, just bring them over and then I’ll work out a price. So say if it does break down at say four years old, let’s be honest, they’re probably not going to be able to fix it.
MR BELLIS: Yep.
MARK: Because technology has gone so far. If they cannot fix it, they have to replace it with the equivalent model that we’ve got.
MR BELLIS: Yep, okay.
MARK: If they can’t replace it with the equivalent model, they give you that back as a gift card. Buy whatever you want.
MR BELLIS: Is that if you buy the extended warranty?
MARK: If you buy the extended warranty.
MR BELLIS: Yeah okay.
16(a) MARK: If it breaks down in the 12 months, okay, Samsung will replace it.
MR BELLIS: Replace it.
MARK: Because it’s only going to be 12 months, if they can’t fix it.
16(b) MR BELLIS: And they’ll only replace – you can’t get – can you get a refund or is it just, no?
MARK: They’ll replace it or – they’ll fix it first and then replace it.
16(c) MR BELLIS: And what if – if you don’t get the extended warranty, you’re in trouble?
MARK: It comes with a 12-month warranty and if it breaks down at 12 months and one day, I can’t help you.
MR BELLIS: Okay.
MARK: I’m not being mean or rude, but I seriously can’t help you.
16(d) and 16(e) MR BELLIS: So you couldn’t give us a refund, you couldn’t repair or anything, okay.
MARK: Nup, as soon as it hits 12 months, unfortunately - - -
MR BELLIS: We’re on our own?
MARK: Pretty much.
MR BELLIS: Yeah, okay.
MARK: When it hits - - -
MR BELLIS: I’ve been burnt in the past, so that’s why I’m asking plenty of questions.
MARK: Yeah, no, that’s all right.
MR BELLIS: Help this guy, if you want.
MARK: That will help you out.
MR BELLIS: Okay.
MS MONTERO: Oh, thank you.
MARK: We actually put our warranties in writing, we give it to every single customer if they extend the warranty.
MR BELLIS: Yep.
MARK: So you know what it covers, and what it doesn’t cover. It covers all wear and tear, parts, labour, courier, everything.
MR BELLIS: Sweet.
MARK: For instance, this remote, or the Sony remote, it comes with a three-month warranty.
MR BELLIS: Oh really.
MARK: The TV comes with a 12-months – you extend the warranty, that comes actually under extended warranty.
MR BELLIS: Okay, as well, yeah.
MARK: Because it’s a part what wears out, wear and tear.
MS MONTERO: Okay. So what are you thinking?
MR BELLIS: Sweet, Samsung. I don’t know whether we have any more questions, do we?
MS MONTERO: No. Do you think we should go?
MR BELLIS: Yeah, let’s go.
MS MONTERO: Okay. Should we say goodbye to him? Let him know that we’re thinking about it? Thanks so much for your help. We’ll think about it, and then come back.
MARK: I’m sorry, (indistinct) through the (indistinct). [I’m sorry, have a read through the booklet]
MR BELLIS: Yeah, will do.
…
26
11
11