Unconscionable%20Conduct%20Part%20IVA%20Trade%20Practices%20Act

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Unconscionable ConductPart IVA Trade Practices
Act

• Sweeney OReilly
• 1st Ed. pp 61 64
• 2nd Ed. Pp 88 -91

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• s51AA (1) Trade Practices Act
• A corporation must not, in trade or commerce,
  engage in conduct that is unconscionable within
  the meaning of the unwritten law, from time to
  time, of the States and Territories.
• Applies only to consumer contracts

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• s51AB (1) Trade Practices Act
• A corporation shall not, in trade or commerce, in
  connection with the supply or possible supply of
  goods or services to a person, engage in conduct
  that is, in all the circumstances,
  unconscionable.
• Applies only to consumer contracts

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• s51AB (2) Trade Practices Act
• Provides a non-exhaustive list of matters a Court
  can have regard to in determining if
  unconscionable conduct has occurred
• Court may have regard to
• the relative strengths of the bargaining
  positions of the corporation and the consumer
• Whether conditions were not reasonably necessary
  for the protection of the legitimate interests of
  the corporation

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• s51AB (2) Trade Practices Act
• Court may have regard to (cont.)
• Whether the consumer was able to understand any
  documents
• Undue influence and unfair tactics
• The cost of identical goods\services

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• Exclusions
• The Court shall not have regard to any
  circumstances that were not reasonably
  foreseeable at the time of the alleged
  contravention (s51AB(4) TPA)
• Instituting legal proceedings\arbitration is not
  unconscionable conduct (s51AB(3) TPA)

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• s51AC(1) Trade Practices Act
• Designed to cover small businesses
• A corporation must not engage in unconscionable
  conduct
• in trade or commerce
• in connection with
• the supply of goods or services to a person
  (other than a listed company)
• the acquisition of goods or services from a
  person (other than a listed company)
• Limited to contracts under 1 million

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• s51AC(3) Trade Practices Act
• Provides a non-exclusive list of matters court
  can take into account
• Similar to s51AB(2) Trade Practices Act but also
• Whether the suppliers conduct was consistent with
  similar transactions with others
• Industry codes applicable to the supplier
• Industry codes that the business consumer
  reasonably believed applied to the supplier

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• s51AC(3) Trade Practices Act (cont.)
• Matters to be taken into account (cont.)
• Unreasonable failure by supplier to disclose its
  intended conduct and risks to business consumer
  from that behaviour
• The degree to which the supplier was willing to
  negotiate terms
• The extent to which the supplier and business
  consumer acted in good faith

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• Torts
• The Law of Negligence
• Sweeney OReilly
• 1st Ed, pp 42 49
• 2nd Ed. Pp20 - 45

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• Definition
• Conduct falling below the standard demanded for
  the protection of others against unreasonable
  risk of harm
• This means that a person can sue for negligence
  when he is injured by another person who either
• Did an act which a reasonable person in the
  circumstances would not have done (an act of
  negligence) or
• Failed to do an act that a reasonable person in
  the circumstances would have done (negligence by
  omission)
• and that action or failure caused the injury.

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• Elements of Negligence
• Defendant owed a duty of care to the plaintiff to
  take reasonable care to prevent him for suffering
  injury, loss or damage
• There was a breach of the duty of care by failing
  to adhere to the standard of care expected
• The breach of duty caused damage to the plaintiff
• The plaintiff suffered damage that was of a kind
  which was reasonably foreseeable i.e. was not too
  remote

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• Duty of Care Physical Damage
• Two part test
• Reasonable foreseeability test
• Proximity relationship test

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• Reasonable foreseeability test
• A reasonable person, in the circumstances of the
  defendant, would have reasonably foreseen that
  because of his actions there was a risk of injury
  to the plaintiff, or to a class of persons of
  whom the plaintiff was a member

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• Reasonable foreseeability test (cont.)
• BEFORE the damage occurred, a reasonable person
  could foresee SOME kind of damage COULD occur
• Donoghue v Stevenson (SOR p17\21)
• Grant v Australian Knitting Mills (SOR p23\36)
• Levi v Colgate-Palmolive (SOR p19\23)

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• Proximity Test
• There was sufficient proximity or closeness
  between the plaintiff and the defendant
• This limits the Reasonable Foreseeability test
• Used to limit duty of care on public policy
  grounds
• The neighbour test
• Donoghue v Stevenson (SOR p18\22)

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• Proximity Test
• Justice Deane in Jaensch v Coffey (1984) 151 CLR
  549 stated that proximity could be established in
  one of 3 ways
• Physical proximity
• Circumstantial proximity
• Causal proximity

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• Duty of Care Financial Loss
• Recovery of pure economic loss was denied by
  the courts for many years as economic effects may
  be more extensive than physical effects
• Now allowed, but very narrow application
• Hedley Byrne V Heller Partners (SOR p49\69)
• Difficult to Develop tests to avoid too onerous a
  duty

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• Duty of Care Financial Loss (cont.)
• Perre v Apland (SOR p21\30) suggests limits
• Whether plaintiff belonged to a determinate or an
  indeterminate class
• Plaintiffs vulnerability dependency on
  defendant
• Defendants knowledge of plaintiffs
  vulnerability
• Whether defendant assumed responsibility for the
  risk being taken by the plaintiff
• Applied in Johnson Tiles v Esso (2nd Ed. P 32)

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• Breach of Duty
• Defendants will breach their duty of care if they
  fail to live up the standard of care expected in
  the circumstances
• An objective test
• A 2 stage process

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• Breach of Duty (cont.)
• First stage
• Would a reasonable person believe that the risk
  of injury to the plaintiff was reasonably
  foreseeable and
• Would a reasonable person have responded to that
  risk at all and, if so, how.
• Actions of defendant are compared with what a
  reasonable person would\would not have done

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• Breach of Duty (cont.)
• The degree of care expected in any particular
  case depends on all the surrounding circumstances
• May vary according to
• amount of risk, and
• seriousness of the injury foreseen
• If a person claims special skills then they must
  live up to the standard of the reasonable expert
  in that field

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• The Standard of Care
• Factors in assessing the standard of care
• Probability of the risk occurring
• ODwyer v Leo Buring (SOR p22\35)
• Gravity of the injury
• Rasbora v JCL Marine Ltd (SOR p 23\35)
• Adelaide Chemical v Carlyle (SOR p24\37)

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• The Standard of Care
• Practicability and cost of eliminating risk
• Norton v Streets Ice Cream (SOR p24\37)
• Age and capacity of the plaintiff
• Social value of defendants action
• Common practice

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• Causation
• A question of fact
• The but for testIf you can say that the
  damage would not have happened but for a
  particular fault, then that fault is in fact a
  cause of the damage but if you can say that the
  damage would have happened just the same, fault
  or no fault, then fault is not the cause of the
  damage per Denning LJ in Cork v Kirby Maclean
  (1952) 2 All ER 402

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• Causation (cont.)
• If a number of factors contribute to loss, the
  but for test may not be conclusive
• Did the defendants act or omission materially
  contribute to the plaintiffs loss?

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• Causation (cont.)
• Must prove each element of the causal link
• Kenny Good v MGICA (SOR p 49\71)
• Defendant will not be liable if the plaintiffs
  loss was inevitable
• Chapel v Hart (SOR p26\40)

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• Damage
• Plaintiff must prove that
• Damage is of a kind recognised by law
• e.g. loss of income, pain suffering etc.
• Damage was of a kind that was reasonably
  foreseeable
• Damage will be foreseeable when the risk of
  damage is a real risk which would occur to the
  mind of a reasonable man in the defendants
  position and which he would not brush aside as
  far-fetched

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• Defences to Negligence
• Contributory Negligence
• Voluntary Assumption of Risk
• Novus Actus Interveniens
• Illegal enterprise
• Statutory Reforms

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• Contributory Negligence
• If the plaintiff
• failed to take precautions for his own safety
• Such failure contributed to his injury
• Then the plaintiffs compensation is reduced
• Damages are apportioned according to the relative
  degree to which the parties negligence
  contributed to the loss
• Partial defence
• Burden on the defendant

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• Voluntary Assumption of Risk
• Volenti non fit injuria
• Defendant must prove
• Plaintiff knew of the risk
• Plaintiff fully appreciated the risk
• Plaintiff accepted the risk freely and willingly
• Consent can be express or implied
• A total defence
• Burden of proof is on the defendant
• Moore v Woodforth (SO 2nd Ed. p 43)

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• Statutory Reforms
• Each State is different
• Persons engaged in risky recreational pursuits
  are assumed to be aware of the risks
• Protection for Good Samaritans and volunteers
  acting in good faith