Australian Competition & Consumer Commission v Wizard Mortgage Corporation Limited [2002] FCA 1317

FEDERAL COURT OF AUSTRALIA

Australian Competition & Consumer Commission v Wizard Mortgage Corporation Limited [2002] FCA 1317

TRADE PRACTICES – misleading conduct – whether injunctive power should be used to deter further misleading conduct – whether orders for corrective advertising and a trade practices compliance program should be made

Trade Practice Act 1974 (Cth) ss 52 and 53

ICI Australia Operations Pty Ltd v Trade Practices Commission (1992) 38 FCR 248 - applied ACCC v Purple Harmony Plates Pty Ltd [2001] FCA 1062 - cited Cassidy v Medical Benefits Fund of Australia [2002] FCA 1097 - cited ACCC v Real Estate Institute (1999) 95 FCR 114 – cited ACCC v Z-Tek Computer Pty Ltd (1997) 78 FCR 197 - cited AUSTRALIAN COMPETITION AND CONSUMER COMMISSION v WIZARD MORTGAGE CORPORATION LIMITED V 68 OF 2002 MERKEL J 25 OCTOBER 2002 MELBOURNE

IN THE FEDERAL COURT OF AUSTRALIA

VICTORIA DISTRICT REGISTRY V 68 OF 2002

BETWEEN: AUSTRALIAN COMPETITION AND CONSUMER COMMISSION

APPLICANT

AND: WIZARD MORTGAGE CORPORATION LIMITED

(ACN 073 819 002)

RESPONDENT JUDGE: MERKEL J

DATE OF ORDER: 25 OCTOBER 2002

WHERE MADE: MELBOURNE

THE COURT DECLARES THAT: 1. The Respondent, by causing to be broadcast on the Channel Nine television network during June 2001 and July 2001 an advertisement which represented to consumers in Brisbane, the Gold Coast and Melbourne that the Respondent offered mortgage loans at the interest rate of 5.64% with all the following features, namely: (i) repayments credited direct from salary; (ii) the option of changing from monthly to fortnightly or weekly repayments; and (iii) the absence of ongoing monthly fees; when in fact the Respondent did not offer mortgage loans to consumers at the interest rate of 5.64% with all of those features, has in trade or commerce, engaged in conduct that was misleading or deceptive or was likely to mislead or deceive in contravention of section 52 of the Trade Practices Act 1974 (Cth). 2. The Respondent, by causing to be broadcast on the Channel Nine television network during June 2001 and July 2001 an advertisement which represented to consumers in Brisbane, the Gold Coast and Melbourne that the Respondent offered mortgage loans at the interest rate of 5.64% with all the following features, namely: (i) repayments credited direct from salary; (ii) the option of changing from monthly to fortnightly or weekly repayments; and (iii) the absence of ongoing monthly fees; when in fact the respondent did not offer mortgage loans to consumers at the interest rate of 5.64% with all of those features, has in trade or commerce, falsely represented that services were of a particular standard, quality, or value in contravention of section 53(aa) of the Trade Practices Act 1974 (Cth). 3. The Respondent, by causing to be broadcast on the Channel Nine television network during June 2001 and July 2001 an advertisement which represented to consumers in Brisbane, the Gold Coast and Melbourne that the Respondent offered mortgage loans at the interest rate of 5.64% with all the following features, namely: (i) repayments credited direct from salary; (ii) the option of changing from monthly to fortnightly or weekly repayments; and (iii) the absence of ongoing monthly fees; when in fact the Respondent did not offer mortgage loans to consumers at the interest rate of 5.64% with all of those features, has in trade or commerce, represented that services had performance characteristics, uses or benefits they did not have in contravention of section 53(c) of the Trade Practices Act 1974 (Cth). 4. The Respondent, by causing to be broadcast on the Channel Nine television network during June 2001 until in or about July 2001 an advertisement which represented to consumers in Brisbane, the Gold Coast and Melbourne that the Respondent offered mortgage loans at the interest rate of 5.64% with all the following features, namely: (i) repayments credited direct from salary; (ii) the option of changing from monthly to fortnightly or weekly repayments; and (iii) the absence of ongoing monthly fees; when in fact the Respondent did not offer mortgage loans to consumers at the interest rate of 5.64% with all of those features, has in trade or commerce, made a false or misleading representation with respect to the price of a service in contravention of section 53(e) of the Trade Practices Act 1974 (Cth)." AND THE COURT ORDERS THAT (a) The Respondent by itself, its employees, servants and agents or howsoever otherwise, be restrained for a period of 18 months from the date of this order, from causing the publishing or broadcasting of advertisements for its housing mortgage loans which represent that the loans have features that they do not have, or that loans at a specified interest rate have features that they do not have. AND THE COURT DIRECTS THAT (b) Submissions as to costs be filed and served by the respondent within 7 days and the applicant's response to those submissions be filed and served 7 days after the receipt of the respondent's submissions.