by Katrina Brown | Mar 14, 2013 | Body Corporate Law, Commercial Law, Debt Recovery, Litigation Process
You have a debt you want recovered – we can help with that! We do not want to waste your time or money – so in order to fast track the process to allow us to sue someone for a debt (remember we have a 24 hour turn around time on new referrals, and 8 hours if all materials are turned over at the time of referral), we need each of the following provided with your referral (scanned copies are more than sufficient):
1. Completed Credit Application, including any Terms and Conditions and/or Guarantee(s);
2. Invoices;
3. Current Statement of Account; and
4. Any relevant correspondence between the you and your debtor.
Importantly, if there is a history of a dispute over the debt – for example, the debtor says that you did do “something” and so the debtor disputes your debt, then let us know this as well. The last thing we want to do is push your demands against a debtor, when the fall out could be the debtor has a claim against you. With the Australian Consumer Protection Laws as they are – it always helps to ensure we have you covered off in terms of reviewing such disputes before pushing debt recovery. There may steps necessary to take before debt recover to ensure compliance with the Australian Consumer Protection Laws – after which you can move aggressively into the recovery process. This is a rarity in our practice – but even one instance is too much if you are the one being investigated by the Fair Trade Office.
As our Strategic Plan provides, once we have your completed materials, you can elect a 24 hour demand, 48 hour demand, 7 day demand, 14 day demand or alternative demand process, before proceeding to legal (if required). We find proactively addressing debtor claims, ensures payment before legal proceedings are required. For those more difficult cases, we are positioned and offer court scale fee based legal proceedings with efficiency and transparency.
If you have any questions about our recovery process, we welcome you to contact our offices on (07) 5574 3560 or email info@nautiluslaw.com.au. We thank you for considering Nautilus Law Group..
Submitted by: Nautilus Law Group
by Katrina Brown | Mar 13, 2013 | Body Corporate Law, Commercial Law, Credit Management
As all lawyers and a significant number of clients learn quickly in litigation, finding a Defendant to personally serve can be painfully slow and frustrating. Unfortunately, the Civil Procedure Rules categorically require personal service for originating matters (and a handful of other proceedings).
If the client is unable to provide any further details of the Defendant to personally serve, we recommend a process referred to as a “skip trace.” In simple terms, skip tracing involves hiring an investigator to conduct a search of a wide range of public and private resources, and often involves on site investigation, to find a Defendant’s location. Skip tracing can be a complex and lengthy process, and usually attracts a fee of anywhere between $110 and $1,100 (which varies depending on the scope of the investigation, if on sight investigation is required, this fee can be significantly greater).
A general skip trace includes some of the following searches, but can depend on what information is already held about the Defendant:
- Electoral roll search;
- Electronic White Pages;
- Federated Content Search;
- Australia Securities and Investment Commission;
- Real property;
- Google;
- Social websites;
- Australian Business Number; and
- Reverse phone searches.
Our Team conduct a range of these searches internally, prior to commencement of proceedings (based on the client engagement). However, when these initial searches prove unsuccessful and/or the process servers advise us they are unable to locate the Defendant at the last known address – we will offer a solution being a “skip trace” investigation.
We welcome you to contact our offices on (07) 5574 3560 or email info@nautiluslaw.com.au. We thank you for considering Nautilus Law Group.
by Katrina Brown | Mar 12, 2013 | Commercial Law, Consumer Protection
What? I can’t have a Final Sale – No Refunds Policy? We understand business – we understand that when you make a sale, you want that sale to go to revenue. Unfortunately, the Australian Consumer Law (ACL) does not allow you unilaterally decide the sale is a done deal. In particular, as this Article discusses, you must give your customer the right to a refund. If you refuse that right, the ACL cuts into your revenue line with penalties.
A quick briefer on the Australian Consumer Law (before we discuss refunds and penalties):
The Australian Consumer Law (ACL) is contained within Schedule 2 of the Competition and Consumer Act 2010 (Cth). The ACL contains provisions that aim to provide protection to consumers when purchasing goods and services.
These provisions contain rights of consumers, and obligations of businesses, that are implicit in every contract entered into by a consumer to purchase goods from a supplier. Consumer guarantees include, but are not limited to:
- the goods will be sold with clear title (with no undisclosed securities);
- the goods or services are fit for their intended purpose, or any other purpose identified by the consumer to the seller prior to purchasing the goods;
- the goods will match any sample or demonstration model shown;
- the services will be rendered with due care and skill; and
- the services will be performed within a reasonable time (where no time limit is specified).
If a good or a service fails to meet any of the consumer guarantees, a consumer is provided rights against the seller through the ACL. Depending on the nature of the failure, the consumer has varying remedies against the supplier.
If the failure is classified as a ‘minor failure’, the supplier has the option of choosing between providing the consumer with a repair of the goods, or offering a replacement or a refund. At this level it is the option of the supplier as to which avenue to take, however they are obligated to remedy the failure.
If the failure is a ‘major failure’ the consumer can decide to reject the goods or services and choose a refund or replacement, or ask for the supplier to provide compensation for any loss in value of the goods or services as a result of the failure.
A discussion of the “refund” obligations of a supplier:
Signs in stores or on websites (for online shopping) that state that a business does not offer refunds, or signs that attempt to limit a consumer’s right to redress in circumstances where goods or services fail to comply with a consumer guarantee are unlawful.
Suppliers of goods or services are prohibited from attempting to exclude the applicability of consumer guarantees to avoid obligations under the ACL. Consumers should be aware that their rights exist regardless of the signs or advertisements displayed by the supplier. However, signs that disallow refunds for ‘change of mind’ are lawful as they do not attempt to avoid consumer obligations.
A discussion of the “extended warranties” sold by a supplier:
It is also unlawful for a business to attempt to sell a consumer an extended warranty that provides a consumer with rights that are provided under the ACL. In other words, a consumer cannot attempt to sell a consumer rights that they are already afforded by legislation.
Extended warranties are optional only, and should provide rights above and beyond those already provided by the guarantees under the ACL.
What if I give it a go? What are the penalties imposed by the ACL:
Penalties for providing false or misleading information (i.e. representing to a consumer that they are unable to seek a refund for goods in any circumstance) can be up to $1.1 million for a company or $220,000 for an individual. There are also potential criminal penalties available.
Making an effort to comply with the ACL with regards to refunds not only ensures that your business will not be exposed to penalties for providing false and misleading information, but increases consumer confidence in your business and its practices. Having refund information readily available (such as on your website), and displaying ACL compliant signs at the point of sale, ensures that you are not misleading consumers (even unintentionally) about their rights in regards to consumer guarantees over goods and services.
How do you ensure compliance with the ACL in your business dealings?
We recommend taking steps to ensure compliance with the ACL, and to further ensure that consumers will not be misled into believing that they do not have rights under legislation aimed to protect consumers.
We encourage the implementation of a Refund Policy, which provides restrictions on when a consumer can receive a refund, but also makes them aware of their rights pursuant to the ACL. Having the consumer’s rights, and your obligations, openly available to consumers not only increases their confidence in your business but reduces the chance that a consumer will misunderstand their rights pursuant to the ACL for return of defective products.
Further, it is advisable to have a sign displayed at the point of sale (usually the cash register) that alters consumers to their rights under the consumer guarantees. Such as sign is not compulsory but is recommended for good practice
If you have questions or concerns about your obligations under the ACL, Nautilus Law Group can provide you with advice as to how to develop policies and procedures to ensure compliance with the consumer protection legislation. We welcome you to contact our offices on (07) 5574 3560 or email info@nautiluslaw.com.au. We thank you for considering Nautilus Law Group.
Submitted by: Katrina E. Brown BA JD ATIA TEP SSA
by Katrina Brown | Mar 11, 2013 | Body Corporate Law, Strata/Community Living
Does your common property require improvement, but your Committee is unsure of their rights or the requirements imposed on it by law? Or is your Body Corporate aware of its obligations but requires guidance? At Nautilus Law Group, our team can assist your Committee or Body Corporate to make the correct choices of how to implement any common property improvements.
A Body Corporate cannot make improvements to common property without meeting particular requirements. It must also make sure that the correct procedures are undertaken to ensure it cannot be held liable.
Section 163 of the Body Corporate and Community Management (Standard Module) Regulation 2008 (“the Regulations”) allows for a Body Corporate to make improvements to common property. (Depending on your Body Corporate Scheme, you may be subject to an alternate Regulation Module. For purposes of outlining, in principle, the process across all Modules, we only refer to the Standard Module in this Article. If you have specific questions about a different Module and the Improvement Limits associated with each, please do not hesitate to contact our Team.)
Basic Improvement Limit
A Body Corporate can only make improvements to common property providing the cost of the improvement is not restricted by the monetary limit stipulated within Section 163 of the Regulations. Simply, the improvement must not exceed the basic improvements limit for the community title scheme.
The Regulations provide a definition of this limit as being $300.00 multiplied by the number of lots within the community titles scheme (“the Scheme”). For example if your Body Corporate has five (5) lots, that number (being five) is then multiplied by $300.00, which is $1,500.00. Should the improvement be equal to or less than this amount, the Committee does not require Body Corporate approval to resolve the improvement.
Not only is this section beneficial for lot owners in that the Committee cannot approve a costly large scale improvement but it also allows for the Committee to make decisions on small scale improvements without requiring it being passed by ordinary resolution.
Ordinary Resolution Improvement Range
There are times when a Body Corporate wishes to make improvements to common property on a larger scale. When such a situation arises, the improvement must be approved by ordinary resolution of the Body Corporate. Generally an improvement of a larger scale will far exceed the Basic Improvement Limit of $300.00 multiplied by the number of lots within the Scheme. Large scale improvements may consist of the construction of a new swimming pool or the re-painting of the entire complex.
If the improvement is necessary, section 163 of the Regulations provides for the cost of the improvement to fall within the Ordinary Resolution Improvement Range. It further provides a definition of this limit being $2,000.00 multiplied by the number of lots within the Scheme. For example if your Body Corporate has five (5) lots, that number (being five) is then multiplied by $2,000.00, which is $10,000.00.
Some issue can arise in larger Bodies Corporate, such as those with hundreds of lots, where the proposed improvement reaches the maximum limit. In these situations, the budget for the improvement can be upwards of more than one hundred thousand dollars. There may be a time where you, as a lot owner, may not agree on the improvement or the amount it will cost your Body Corporate. Thankfully, Section 163 assists in protecting lot owners by imposing a maximum limit on large scale improvements and allowing each lot owner the opportunity to vote on whether the improvement should be allowed.
Conclusion
At some point during your ownership of a lot within the Scheme, there is a high probability that your Body Corporate will want/need to make improvements to the common property. When this occurs, it is critical that your Body Corporate meets the requirements under Section 163 of the Regulations. If you or your Body Corporate is unsure or it simply requires clarification or confirmation, the Body Corporate Team at Nautilus Law Group is here to help.
We welcome you to contact our offices on (07) 5574 3560 or email info@nautiluslaw.com.au. We thank you for considering Nautilus Law Group.
by Katrina Brown | Mar 8, 2013 | Commercial Law
Marketing and customer service present legal trappings many businesses have no idea exist. In this economic client, many businesses are on the verge of desperation to “land sales.” Whilst management may not intend “unconscionable conduct” to occur within their sales team, the reality is that the line between “assertive” marketing and “unconscionable conduct” is blurred.
The following discussion considers the Australian Competition and Consumer Commission (“the ACCC”) position in Australian Competition and Consumer Commission v Lux Distributors Pty Ltd (unreported)). The ACCC had originally sought a ruling from the Federal Court that between the dates of 2009 and 2011, sale representatives employed by Lux Distributors Pty Ltd engaged in unconscionable conduct in the course of selling vacuum cleaners to consumers.
The ACCC alleged that the sales representatives employed by Lux engaged in unconscionable conduct when attempting to sell vacuum cleaners as follows:
- The sales representatives would attend the home of a consumer by first advising the consumer that the premise of the home visit was to provide a free maintenance check on an existing vacuum cleaner;
- The real purpose of the visits were to sell the consumers a Lux vacuum cleaner;
- The three consumers targeted were elderly women who were home alone at the time of the visit;
- The representatives remained in the home of the consumers for over one and a half hours;
- The sales representatives did perform a maintenance check on the vacuum cleaners;
- After the maintenance check the representative demonstrated the Lux vacuum cleaner attempting to demonstrate the inferiority of the consumers existing vacuum cleaner;
- Each consumer agreed to purchase the Lux vacuum cleaner for a price of approximately $1999.00; and
- None of the consumers were aware that there was a 10 day statutory cooling off period that applied to their purchase.
The Federal Court ruled that Lux had not acted unconscionably, but the ACCC has appealed this decision, arguing that the judge erred in law by making this finding.
What is unconscionable conduct?
Unconscionable conduct is addressed in Part 2-2 of the Australian Consumer Law (“the ACL”) which is located in Schedule 2 of the Competition and Consumer Act 2010 (Cth).
Section 20 of the ACL provides that:
“(1) A person must not, in trade or commerce, engage in conduct that is unconscionable, within the meaning of the unwritten law from time to time.”
This section essentially allows for unconscionable conduct within the meaning of the common law to be remedied by the remedies provided for under the ACL.
Section 21 relates to business to consumer transactions, and provides:
(1) A person must not, in trade or commerce, in connection with the supply or possible supply of goods or services to another person, engage in conduct that is, in all the circumstances, unconscionable.
(2) Without in any way limiting the matters to which the court may have regard for the purpose of determining whether a person (the supplier) has contravened subsection (1) in connection with the supply or possible supply of goods or services to another person (the consumer), the court may have regard to:
- the relative strengths of the bargaining positions of the supplier and the consumer; and
- whether, as a result of conduct engaged in by the person, the consumer was required to comply with conditions that were not reasonably necessary for the protection of the legitimate interests of the supplier; and
- whether the consumer was able to understand any documents relating to the supply or possible supply of the goods or services; and
- whether any undue influence or pressure was exerted on, or any unfair tactics were used against, the consumer or a person acting on behalf of the consumer by the supplier or a person acting on behalf of the supplier in relation to the supply or possible supply of the goods or services; and
- the amount for which, and the circumstances under which, the consumer could have acquired identical or equivalent goods or services from a person other than the supplier.
(3) A person is not to be taken for the purposes of this section to engage in unconscionable conduct in connection with the supply or possible supply of goods or services to a person by reason only that the person institutes legal proceedings in relation to that supply or possible supply or refers a dispute or claim in relation to that supply or possible supply to arbitration.
(4) For the purpose of determining whether a person has contravened subsection (1) in connection with the supply or possible supply of goods or services to another person:
- the court must not have regard to any circumstances that were not reasonably foreseeable at the time of the alleged contravention; and
- the court may have regard to conduct engaged in, or circumstances existing, before the commencement of this section.
Section 22 refers to business to business transactions and while it is important to be aware of these provisions, they will not be considered in this article.
The ACCC provides that unconscionable conduct is generally conduct that would or should not be done in good conscience. It is more than conduct that is unfair or harsh, but extends to conduct that has an element of ‘bad conscience’.
Unconscionable conduct has an intentionally broad definition, which the ACL has avoided limiting by the inclusion of Section 20. However, Section 21 does aim to provide some guidelines, but the definition is still broad ranging and is generally determined on a case by case basis. The Court has said “for conduct to be regarded as unconscionable, serious misconduct or something clearly unfair or unreasonable, must be demonstrated” (Cameron v Qantas Airways Ltd (1994) 55 FCR 147) and that “the conduct must demonstrate a high level of moral obloquy on the part of the person said to have acted unconscionably” (Attorney-General (NSW) v World Best Holdings Ltd (2005) 63 NSWLR 557).
Some case examples include:
- Lessees of commercial premises were involved in legal proceedings against the lessor for charging excessive outgoings. The Lessees wished to sell their business and assign the lease. The Lessor agreed to the assignment on the basis that the lessees dropped the legal proceedings. The Lessees agreed to this as they were under pressure to sell. The court held that thi8s conduct was not unconscionable under the common law (Australian Competition and Consumer Commission v GC Berbatis Holdings Pty Ltd (2003) 214 CLR 51).
- A franchisor breached s51AC of the then Trade Practices Act by refusing to deliver products to franchisees, deleting some franchisees numbers from the directory without notice to the franchisees, refusing to address dispute matters with franchisees, refusing to provide requisite disclosure documentation and carrying on business in the territories granted to the franchisees (Australiuan Competition and Consumer Commission v Simply No Knead (Franchising) Pty Ltd (2000) 178 ALR 304).
- The seller of a factory employed an agent. The business manager signed a standard form sole-agency agreement which the manager believed appointed the agent as sole agent for a specified term only. However, the agreement contained a clause that even after the expiry of the agreement; the agent was to earn commission from any buyer that the agent introduced to the manager. Two months after the agreement expired, the agent introduced a buyer to the manager and the manager subsequently refused to pay commission. The Court held that the agent had acted unconscionably as the term was not reasonably necessary to protect the agent’s rights and created an open-ended term of the agency relationship, which was unnecessary to protect the agent’s rights to exclusivity (George T Collings v HF Stevens).
How can I avoid treating consumers unconscionably?
It is important for businesses to be careful, especially when entering into consumer transactions with your clients or customers. There are a number of ‘checks and balances’ that can be put in place to avoid finding your business in a situation where it may be accused of acting unconscionably:
- Ensure to disclose all important terms of the contract or document being signed by the parties;
- Give the other party an opportunity to seek independent legal advice before entering into the transaction (where applicable);
- Be aware when your business is in a particularly strong position, such as where you have a greater bargaining position than the consumer;
- Try to provide the consumer the opportunity to negotiate terms of the contract, and avoid using standard form contracts where possible; and
- Have policies and procedures in place to attend to and handle disputes appropriately.
As the definition of unconscionable conduct is broad, it is important always to have policies in place to monitor business practices with consumers to ensure that your business is not unknowingly taking advantage of the weak bargaining position of your consumers, by forcing them to comply with unnecessary terms, using pressure to force consumers to enter into transactions or charging excessive prices for products or services.
If you are unsure whether your business practices could be considered unconscionable, it is advisable to seek legal advice before you act. Nautilus Law Group can assist you in developing checks and balances to ensure that you are treating consumers fairly and not engaging in conduct that could otherwise be considered unconscionable.
Should you wish to discuss this topic further, we welcome you to contact our offices on (07) 5574 3560 or email info@nautiluslaw.com.au. We thank you for considering Nautilus Law Group.
Submitted by: Katrina E. Brown BA JD ATIA TEP SSA
