Australian Competition and Consumer Commission v Ultra Tune Australia Pty Ltd [2019] FCA 12

FEDERAL COURT OF AUSTRALIA

Australian Competition and Consumer Commission v Ultra Tune Australia Pty Ltd [2019] FCA 12 File number: NSD 750 of 2017

Judge: BROMWICH J

Date of judgment: 18 January 2019

Catchwords: CONSUMER LAW – whether franchisor contravened disclosure requirements in the Competition and Consumer (Industry Codes – Franchising) Regulation 2014 (Franchising Code) – whether franchisor contravened cl 6(1) of the Franchising Code, obligation to act in good faith – whether franchisor engaged in misleading or deceptive conduct – whether franchisor made false or misleading representations – whether conduct of the franchisor aberrant – held: contraventions established as alleged – assessment of pecuniary penalties – held: pecuniary penalty of $2,604,000 imposed; ancillary declarations and other relief to be granted in final orders

Legislation: Australian Consumer Law (contained in Sch 2 to the Competition and Consumer Act 2010 (Cth)) ss 18, 29, 224, 239, 246 Competition and Consumer Act 2010 (Cth) ss 51ACA, 51ADA, 51ADB, 51AE, 51ACB, 76, 86C Crimes Act 1914 (Cth) s 4AA Evidence Act 1995 (Cth) s 140(2) Federal Court of Australia Act 1976 (Cth) s 37AF Trade Practices Act 1974 (Cth) ss 51AD, 52, 53 Competition and Consumer (Industry Codes – Franchising) Regulation 2014 (Cth) Sch 1, cll 2, 4, 5, 6, 8, 9, 10, 15, 16, 31 Trade Practices (Industry Codes – Franchising) Regulations 1998 (Cth) cll 2, 4, 6, 6A, 6B, 17, 19, 23A

Cases cited: Alcatel Australia v Scarcella (1998) 44 NSWLR 349 Australian Competition and Consumer Commission v Birubi Art Pty Ltd [2018] FCA 1595 Australian Competition and Consumer Commission v Singtel Optus Pty Ltd (No 4) [2011] FCA 761; 282 ALR 246 Briginshaw v Briginshaw (1938) 60 CLR 336 Burger King Corporation v Hungry Jack's Pty Ltd [2001] NSWCA 187; 69 NSWLR 558 Byrne v Australian Airlines Ltd (1995) 185 CLR 410 Commonwealth v Director, Fair Work Building Industry Inspectorate [2015] HCA 46; 258 CLR 482 Construction, Forestry, Maritime, Mining and Energy Union v Australian Building and Construction Commissioner [2018] FCAFC 97 Health Clinic Pty Ltd v Sydney South West Area Health Service [2010] NSWCA 268 Meridian Retail Pty Ltd v Australian Unity Retail Network Pty Ltd [2006] VSC 223 Overlook Management BV v Foxtel Management Pty Ltd [2002] NSWSC 17 Pierce Bell Sales Pty Ltd v Frazer (1973) 130 CLR 575 Renard Constructions (ME) Pty Ltd v Minister for Public Works (1992) 26 NSWLR 234 R v JS [2007] NSWCCA 272; 230 FLR 276 Strzelecki Holdings Pty Ltd v Cable Sands Pty Ltd [2010] WASCA 222; 41 WAR 318 Sydney Medical Service Co-operative Limited v Lakemba Medical Services Pty Ltd [2016] FCA 763 Veen (No 2) v The Queen (1988) 164 CLR 465 Virk Pty Ltd (in liq) v YUM! Restaurants Australia Pty Ltd [2017] FCAFC 190; [2017] ATPR 42-563 Bilson, B, The Future of Franchising (Treasury, Canberra, 2014) Gummow W, "What is in a Word? 'Legitimate' Interests and Expectations as a Common Law Criteria" (2018) 45 Australian Bar Review 23 Summers RS, "'Good Faith' in General Contract Law and the Sales Provisions of the Uniform Commercial Code" (1968) 54 Virginia Law Review 195 Wein, A, Review of the Franchising Code of Conduct: Report to the Hon Gary Gray AO MP, Minister for Small Business, and the Hon Bernie Ripoll MP, Parliamentary Secretary for Small Business (Department of Industry, Innovation, Climate Change, Science, Research and Tertiary Education, Canberra, 2013)