REAL
ESTATE UNDERTAKINGS & FINDINGS - ACC
The
following are some recent undertakings and decisions concerning real
estate and like businesses:
RAY
WHITE REAL ESTATE
ACCC
accepts Ray White Real Estate administrative undertakings.
The Australian
Competition and Consumer Commission has accepted administrative
undertakings from Ray White (Real Estate) Pty Ltd and one of its
agencies following allegations of misleading and deceptive
advertising.
Ray White (Real
Estate) Pty Ltd is the master franchisor of the Ray White network in
Queensland.
Following a
complaint about the advertising and auction of three properties in
Brisbane's northern suburbs in late 2003, the ACCC expressed concern
that the properties were promoted using indicative prices
significantly below the prices at which they were passed at auction.
The ACCC believed the action placed the agency at risk of breaching
the misleading and deceptive conduct provisions of the Trade
Practices Act 1974, in particular, sections 52, 53(e) and 53A*.
Ray White Pty Ltd
and its agent acknowledged that the actions may have raised
implications under the misleading or deceptive conduct provisions of
the Act and offered administrative undertakings to address the ACCC's
concerns and to ensure future property advertising by the entire
Queensland Ray White network comply with the Act.
As part of its
administrative undertakings, Ray White Pty Ltd and its agent have
agreed to:
- refrain from
engaging in the conduct in question, including 'indicative pricing' or
'bait pricing' when advertising properties in the future
- bring to the
attention of all Queensland Ray White franchisees the details of the
conduct in question and the concerns of the ACCC
- conduct
training sessions on a regular basis for Ray White's office principals
and salespeople which contain elements pertaining to trade practices
compliance, to update Ray White's materials, content and methodology
with the specific provisions of the Act pertaining to 'indicative
pricing', in particular sections 52, 53(e) and 53A and to convene a
specifically designed training program
- amend manuals
to include specific references to the relevant sections of the Act
- issue a formal
policy that all of its offices must comply with the specific provisions
of the Act as they relate to 'indicative pricing'.
ACCC Chairman, Mr
Graeme Samuel, said the administrative undertakings are an effective
and positive resolution to this matter and the high level of
cooperation provided by Ray White Pty Ltd and its agent should also
be acknowledged.
"The
undertakings are particularly beneficial as they seek to ensure
compliance by the entire Queensland Ray White network.
"Ray White's
recognition that its agent's actions in this instance may raise
implications under the Act should alert other real estate companies
that it is in their commercial interests to ensure that advertising
practices comply with the Act", Mr Samuel said.
January
2005
*Section 52
prohibits a corporation from engaging in conduct which is misleading
or deceptive, or which is likely to mislead or deceive. Section 53(e)
prohibits a corporation from making false or misleading
representations with respect to the price of goods or services.
Section 53A prohibits a corporation from making false or misleading
representations in relation to the sale of land.
ANGLO
ESTATES
Property
developer penalised for attempted price fix Property
developer Anglo Estates Pty Ltd attempted to enter into price-fixing
and other anti-competitive arrangements with the Shire of Esperance
over the sale of land in the shire, in breach of the Trade
Practices Act 1974,
the Federal Court, Perth has found.
Justice Robert
French also declared that Anglo Estates directors, Ken and Ross
Williamson, had attempted to induce the Shire to enter into a
price-fixing arrangement in contravention of the Act.
The court ordered
Anglo Estates to pay pecuniary penalties of $15,000 and Mr Ross
Williamson to pay a pecuniary penalty of $5,000. While the Australian
Competition and Consumer Commission sought higher penalties against
Anglo Estates and its directors, Justice French believed a modest
penalty was appropriate. The ACCC is currently considering that
aspect of the judgment.
The declarations
and penalties follow ACCC action in March 2004 which alleged that
Anglo Estates tried to reach an arrangement where the Shire would not
sell vacant residential lots in its Flinders Estate development for
less than $80,000 per lot when lots first became available, with
annual CPI adjustments for subsequent years.
It was also
alleged that Anglo Estates attempted to reach an arrangement in which
the Shire would not develop and sell until the end of 2010 some
vacant residential lots in its Flinders Estate development.
The ACCC did not
allege in any way that the Shire had contravened the Act.
By consent the
Federal Court declared that Anglo Estates had attempted to contravene
the Act and that the Williamsons had attempted to induce the Shire to
contravene the Act. By consent the court also restrained Anglo
Estates and its directors from engaging in similar conduct for three
years and ordered Anglo Estates to pay the ACCC's costs.
"Consumers in
any part of Australia, facing important decisions about the purchase
of residential land are entitled to expect that land prices are
determined by a fair market and not dictated by attempts at
anti-competitive conduct", ACCC Chairman, Mr Graeme Samuel,
said.
LIQUORLAND
Federal
Court penalises Liquorland $4.75 million for anti-competitive liquor
deals Liquorland (Australia) Pty Ltd has been penalised $4.75 million
by the Federal Court after the company admitted that it entered into
illegal agreements with a number of applicants for liquor licences in
New South Wales.
"This is a
significant penalty for a contravention of Part IV of the Trade
Practices Act which should serve as a warning to other companies
which may try to prevent new entrants to markets from being able to
compete effectively", Australian Competition and Consumer
Commission Chairman, Mr Graeme Samuel, said today.
The ACCC
instituted legal proceedings in the Federal Court against Liquorland
and Woolworths Limited on 30 June 2000. The case against the second
respondent Woolworths is continuing before Justice Allsop.
Liquorland, a
subsidiary of Coles Myer Ltd, admitted to five contraventions of the
exclusionary (primary boycott) provisions of the Act. In determining
the appropriate penalty to recommend to the court, the ACCC welcomed
Liquorland's cooperation in resolving the case prior to the
commencement of a lengthy and expensive trial.
"Following
the ACCC first raising the issue with Coles Myer the company ceased
entering into similar agreements", Mr Samuel noted. "The
ACCC also recognises that Coles Myer has in recent years made a
substantial investment in trade practices law compliance training and
strategies throughout the company".
Liquorland has
conceded that it had entered into five agreements with liquor licence
applicants for the substantial purpose of restricting and preventing
those businesses from competing with its own Liquorland stores in the
supply of takeaway liquor.
The ACCC had
alleged that the conduct arose in circumstances where Liquorland
objected to certain liquor licence applications and then proposed
restrictive agreements in return for withdrawing their objections.
The restrictive agreements contained one or more conditions to the
following effect:
- preventing
liquor licence applicants from selling packaged takeaway liquor from
their premises
- preventing
liquor licence applicants opening a dedicated bottleshop
- restricting and
preventing liquor licence applicants from establishing a separate
drive-through bottleshop
- restricting and
preventing liquor licence applicants from advertising or conducting
promotions for the sale of packaged takeaway liquor over the counter to
consumers
- preventing
liquor licence applicants from being able to offer home delivery
services for packaged takeaway liquor to consumers
- preventing
liquor licence applicants from expanding the size of their licensed
premises to meet potential increased consumer demand
- limiting the
amount of packaged takeaway liquor which liquor licence applicants can
keep on their premises in order to meet consumer demand.
The ACCC agreed to
discontinue a number of its claims against Liquorland in order to
settle the matter.
Justice Gyles
today ordered Liquorland pay pecuniary penalties of $950,000 for each
of the contraventions ($4.75 million in total) as follows:
- Ettamogah Bar
& Restaurant, Campbelltown;
- Dry Dock
Bottleshop, Tweed Heads;
- Global Beer
Importers, Tweed Heads;
- Jin Ro
Australia, Arncliffe;
- Henry Kendall
Family Bistro and Tavern, West Gosford.
When imposing the
penalty of $4.75 million against Liquorland, Justice Gyles noted
that: "each of the deeds in question constituted a significant
restriction upon the business of the third party compared with the
position that would have pertained had the party obtained an
unrestricted licence…. It is also obvious that consumers lost the
choice and competition between outlets that otherwise would have been
available in the event a third party did obtain an unrestricted
licence.
"It follows
that there would have been significant loss or damage to those
parties and a significant gain to Liquorland by reason of the
contravening conduct".
In addition
Justice Gyles ordered injunctions against Liquorland preventing it
for a period of three years from engaging in similar conduct in the
future or giving effect to any existing deeds which had legal effect
independently of proceedings in the Licensing Court in respect of a
liquor licence application and which was made for the purpose of
preventing, restricting or limiting the supply of takeaway liquor. He
also ordered that Liquorland make a contribution to the ACCC's costs
of $250,000.
PETROL
PRICE FIXING
ACCC
begins proceedings for alleged petrol price-fix The Australian
Competition and Consumer Commission has begun legal proceedings
alleging price-fixing by two petrol retailers in the suburb of
Woodridge, south of Brisbane.
The ACCC has
alleged in the Federal Court that during periods in 2002 to 2004 Mr
Terence O'Keeffe and Mr Parmjit Singh, the respective managers of the
Matilda Woodridge and BP Logan City sites (which are both located on
Kingston Road Woodridge) made and gave effect to arrangements that
they would agree the time within the weekly price cycle that they
would each increase their prices for unleaded petrol, and the amount
they would each charge.
It is further
alleged that Mr Terence O'Keeffe and Mr Parmjit Singh made and gave
effect to an arrangement to increase their respective prices for
liquefied petroleum gas (LPG) in November 2002.
It is alleged Mr
Terence O'Keeffe made the unleaded petrol arrangements on behalf of
O'Keeffe Nominees Pty Ltd, and the LPG arrangement on behalf of
Meribell Pty Ltd. It is alleged Mr Parmjit Singh made both the
unleaded petrol and the LPG arrangements on behalf of Gullyside Pty
Ltd. It is alleged such arrangements contravene section 45 of
the Trade
Practices Act 1974.
The ACCC is
seeking injunctions and declarations against Gullyside Pty Ltd and Mr
Parmjit Singh, and is seeking injunctions, declarations and pecuniary
penalties against O'Keeffe Nominees Pty Ltd, Meribell Pty Ltd and Mr
Terence O'Keeffe.
PROPERTY
INVESTMENT SEMINAR
Advertisements
for millionaire property investment seminar 'misleading'
The Federal Court
has made orders, by consent, against property investment seminar
promoter Giann & Giann Pty Ltd and its director, Mr John
Giannopoulos, for misleading and deceptive conduct in the promotion
of a Secrets
of a Real Estate Millionaire
property investment seminar.
Giann & Giann
Pty Ltd, trading as Break Free Events, was responsible for
advertisements which appeared in a number of Australian newspapers in
late 2003, advertising a "Free Event" to be presented by
property investor, Mr Peter Flanagan.
The Australian
Competition and Consumer Commission instituted proceedings against
Giann & Giann and Mr Giannopoulos in September 2004, alleging
that in the newspaper advertisements, as well as brochures handed out
to attendees of the free seminars advertising a four-day course, the
following representations were made:
- that attendees
of the free seminar would be given a unique formula of property
investment strategies that when implemented, were certain to produce
profit and wealth through investment in property; and
- that attendees
of the four-day course who implemented the property investment
strategies taught would be likely to become wealthy by investing in
property, even if they had no money at the time they commenced to
implement the strategies;
when, in fact:
- Giann &
Giann did not have reasonable grounds for making the representations;
- the investment
strategies were not unique and did not consist of a formula that when
implemented was certain to produce wealth;
- those who
implemented the property investment strategies were not likely to
become wealthy by investing in property, whether or not they had money
of their own at the time they commenced to implement the strategies;
and
- the strategies
were not actually taught at the free seminars.
The ACCC alleged
that Mr Giannopoulos had aided, abetted, counselled or procured and
was knowingly concerned in or a party to Giann & Giann's alleged
misleading and deceptive conduct in promoting the seminars and
course.
The Federal Court has declared, by consent, that the
conduct of Giann & Giann and Mr Giannopoulos in relation to the
advertisements and brochures was misleading and deceptive or likely
to mislead or deceive in contravention of section 52 of the Trade
Practices Act 1974.
Further, the
Federal Court has ordered the following by consent:
- injunctions
permanently restraining Giann & Giann and Mr Giannopoulos from
publishing the advertisements or any advertisements substantially the
same as them; or from making the representations or any representations
to substantially the same effect as those made in the advertisements;
- a requirement
that Mr Giannopoulos undertake a trade practices compliance program
within the next 12 months; and
- a requirement
that Giann & Giann make a contribution toward the ACCC's costs in
the proceedings.
"This is a
good result of the ACCC's campaign against misleading conduct by
wealth-creation promoters", ACCC Chairman, Mr Graeme Samuel,
said today.
WESTFIELD
ACQUISITIONS
ACCC
not to oppose Westfield acquisitions
The Australian
Competition and Consumer Commission will not oppose the acquisitions
by Westfield of 25 per cent of Sunshine Plaza (Queensland) and 50 per
cent of Woden Plaza (ACT) and Penrith Plaza (NSW) from General
Property Trust, ACCC Chairman, Mr Graeme Samuel, said today.
"Following
market inquiries among retailers and landlords, the ACCC considers
that the acquisitions are unlikely to substantially lessen
competition", Mr Samuel said.
"Westfield
owns a number regional shopping centres* in Sydney and one in
Canberra. However, the ACCC does not consider that this transaction
will result in a substantial lessening of competition as Westfield
will face competition from other regional shopping centres and, to a
lesser extent, from other retail centres.
"In addition,
large tenants have a degree of countervailing power against Westfield
and other landlords as they are essential to the success of any
regional shopping centre.
"In the case
of Sunshine Plaza, Westfield's 25 per cent stake will not give it
management control. It is management control rather than centre
ownership which is the most relevant factor in determining how a
regional shopping centre deals with its retail tenants".
The ACCC will
issue a public competition assessment on this matter in due course.
REAL
ESTATE PRICE PROJECTIONS
Gary
Peer & Associates found to have misled buyers
Real estate agents
Australia-wide have been warned not to mislead prospective buyers
over price projections following a Federal Court decision today.
Justice Sundberg
has found that Gary Peer & Associates Pty Ltd had engaged in
misleading conduct in the way it advertised a property at 341 Glen
Eira Road, Caulfield, Victoria in 2003.
The company
advertised the property with the representations "price guide
$600,000 plus buyers should inspect" and later "price guide
$650,000 plus buyers should inspect".
The court found
that the representations falsely represented the price at which:
- the vendors of
the property were prepared to sell
- the vendors of
the property had instructed the respondent to sell, and
- the real estate
agent believed that the property was likely to sell.
The court also
found that Gary Peer & Associates Pty Ltd did not have reasonable
grounds to make the representations.
Justice Sundberg
stated it was appropriate in this case to make declarations to mark
the court's disapproval of the real estate agency's conduct. He noted
that "the subject matter of the case is of considerable public
interest, involving as it does advertisements for the sale of real
property that affect many members of the public".
He noted that "the
applicant, as a public body charged with the responsibility for
enforcing the Act, has a genuine interest in seeking declarations".
The court ordered
the company to pay the ACCC's costs.
In 2003 the ACCC
identified misleading and deceptive behaviour in the property
industry as a priority area. Since that time the ACCC has worked with
the industry at both the national and local levels to improve
compliance with the Act.
"The Trade
Practices Act requires adequate and appropriate disclosure at all
times of all relevant price information, so that prospective buyers
and the general public can make informed pricing decisions",
ACCC Chairman, Mr Graeme Samuel, said. "This case is the
first case of the underquoting of property prices brought by the
ACCC. The decision has national coverage.
"The court's
decision is a timely reminder that the real estate industry has to be
ever vigilant and compliant with the Trade Practices Act in respect
of its advertising practices".
UNDERGROUND
PROPERTY SCAMS
'Underground'
property scams will be pursued: ACCC
The Australian
Competition and Consumer Commission will continue to pursue
misleading property scams regardless of the methods used to entice
potential investors, ACCC Chairman, Mr Graeme Samuel, has warned in a
speech to the Real Estate Institute of Victoria.
He was responding
to claims that property seminars which made misleading promises about
quick wealth had gone 'underground'.
"We are …
aware that as the heat has been turned up on [misleading property]
seminars, promoters are turning to other methods to continue to lure
investors through spam, direct marketing, telemarketing and even
door-to-door.
"Be assured
that regardless of the method used, the ACCC will continue to keep a
close eye on the property spruikers and take action to protect
consumers".
Mr Samuel said
that since it launched its campaign in the property area, the ACCC
had received more than 300 complaints and inquiries into its
InfoCentre about property seminars, two-tier/time-share property
schemes, auctioneer bidding processes and general concerns about real
estate representations.
"It's clear
from those complaints, and very recent discussions we have had with
the industry, that many in the real estate industry are ignorant of
their responsibilities under the Trade Practices Act, and the role of
the ACCC.
"This is of
particular concern, as the Commission has made it clear that real
estate practices are a priority area".
Mr Samuel said it
appeared agents didn't typically seek legal advice about their
obligations under the Trade Practices Act, and nor was the Act
specifically covered in real estate agents' training
courses.
"There also appears to be some confusion
in the industry, particularly in Victoria, about the powers of the
ACCC and whether this conflicts with state government consumer
affairs agencies and their administration of specific real estate
legislation".
Among the ACCC's
concerns was dummy bidding, which the ACCC regarded as "completely
unacceptable" and which was being outlawed in some States.
"I am aware
of concerns in the industry about the proscriptive nature of the[se]
new regulations, and suggestions that they may lead to anomalies such
as the banning of otherwise perfectly legitimate practices.
"May I
suggest that the industry has only itself to blame for these
consequences. Every industry – regardless of whether they are real
estate agent, phone companies or retail giants - must be sensitive to
community expectations and standards.
"Any industry
which fails to respond to legitimate community concerns cannot
complain when governments, which are sensitive at all times to the
electorate, then pick up the ball and run with it.
"I should
point out that irrespective of the laws introduced in various states
and territories, this will not in any way negate the provisions of
the Trade Practices Act, nor undermine our ability to intervene when
we believe there has been deceptive or misleading conduct.
"While I
strongly support moves by the states to clean up the auction process
and outlaw dummy bids, the Commission will stand firm on the need for
open and transparent processes that are not likely to mislead, and
take action to enforce this where necessary.
"Even if an
agent believes their actions to be legal under state law, we can, and
will act, when behaviour contravenes the Trade Practices Act".
Mr Samuel
commented that concerns about under- and over-quoting continued to be
brought to the ACCC.
"In the view
of the ACCC such behaviour can’t be viewed as anything other than
deceptive and misleading conduct", he said.
"The Trade
Practices Act requires adequate and appropriate disclosure at all
times of all relevant price information, so that prospective buyers
and the general public can make informed pricing decisions.
"Advertising
or quoting a property at a price significantly less than the agent's
estimated selling price, the market valuation or the vendor's price
indications constitutes a breach of the Trade Practices Act.
The Act would also be breached if an agent over quotes the value of a
property to a vendor in order to obtain the listing".
TWO
TIER PRICING
ACCC
to appeal property marketing scheme decision
The Australian
Competition and Consumer Commission will appeal some aspects of the
judgment of the Federal Court made on 18 December 2003 in ACCC v
Oceana Commercial Pty Ltd and Others.
In that judgment,
Justice Kiefel did not find that the conduct of various parties
alleged to be involved in a property marketing scheme on the Gold
Coast contravened the Trade
Practices Act 1974.
The ACCC, which
instituted proceedings in November 2001, acted on a complaint
received from a couple in Cairns who attended an investment seminar
conducted by National Asset Planning Corporation Pty Ltd and were
subsequently flown to the Gold Coast to view investment properties
and visit a finance consultant, Investlend (Aust). The couple
purchased a unit within a marketed development on that day.
Justice Kiefel
considered that the ACCC did not establish that the prices paid were
above the fair market value. Justice Kiefel did not find that
the conduct of the lawyer involved in the conveyancing of the
property for the couple or that of the property developers, had been
shown to contravene the Act.
Further, Justice
Kiefel found that the conduct of the Commonwealth Bank of Australia,
utilised to finance the couple's purchase of the unit, was not
unconscionable. It was not alleged by the ACCC that the bank
was directly involved in the property marketing to the purchasers.
The appeal is
expected to be heard before the Full Federal Court in May 2004.
WESTFIELD'S
UNCONSCIONABLE CONDUCT
ACCC settles
unconscionable conduct, misleading conduct action against Westfield
An Australian
Competition and Consumer Commission action against Westfield Shopping
Centre Management Co. (Qld) Pty Limited (and associated companies and
individuals) alleging unconscionable conduct and misleading conduct
has been settled on a without admissions basis.
As part of the
settlement, Westfield has paid an agreed amount to former retail
tenants of a shop at the Indooroopilly Shopping Centre in Brisbane
(formerly managed by Westfield) and has undertaken to the Federal
Court of Australia that, in future, it will use a specific release of
liability clause when entering into settlement agreements with retail
tenants*.
"Westfield
has provided an undertaking to the Federal Court of Australia
addressing the ACCC's concerns that a condition sought through its
solicitors from the former tenants during settlement of private
litigation between Westfield and those tenants may have contravened
section 51AC** of the Trade Practices Act 1974", ACCC
Chairman, Mr Graeme Samuel, said today.
The ACCC began
proceedings against Westfield in October 2001 alleging misleading or
deceptive conduct and unconscionable conduct in breach of the
Act.
In particular, the ACCC alleged that Westfield acted unconscionably
by making it a condition of the settlement of the private
litigation that the former tenants would sign a deed of release
containing a certain clause releasing liability. Amongst other
things, the clause required that the former tenants not commence,
recommence or continue any action in connection with the subject
matter of their private litigation, including commencing,
recommencing or continuing any administrative or governmental
investigation against Westfield (or other parties involved in the
private litigation).
The ACCC
considered that the condition might have impeded the tenants from
approaching or assisting the ACCC in any investigation into
Westfield’s conduct.
Westfield
acknowledged that the condition may have had the effect of
discouraging the tenants from approaching or assisting the
ACCC, although this effect was not intended.
The ACCC was
concerned that this condition was not reasonably necessary for
the
protection of Westfield’s legitimate interests in ensuring the
finality of the private action between Westfield and the former
tenants, and arose in circumstances where there was a significant
difference in the relative bargaining strengths of the parties.
"The ACCC
considers the matter to be one which raises significant public
interest issues", Mr Samuel said.
"The ACCC
wanted to ensure it or any other law enforcement agency is not unduly
fettered in its investigative functions or inhibited in the
performance of its public duties".
"The
resolution of this matter provides some clarification for landlords
and shopping centre managers about the ACCC's expectations in dealing
with tenants. It also preserves the freedom of citizens to
co-operate with enforcement agencies and ensures that the public
interest is served".
"The ACCC
regards as a high priority the prohibitions on unconscionable conduct
in Part IVA of the Act. All businesses must be careful not to
inappropriately use any power they may have in their dealings with
small business. The ACCC is, and will continue to be, a strong
enforcer of the law, without fear or favour".
Westfield will
contribute to the ACCC’s legal costs.
HILL
END PROPERTY DEVELOPER
Hill
End property developer to refund all purchasers following undertaking
to ACCC
Property buyers
will receive refunds following an Australian Competition and Consumer
Commission investigation of a property development.
The former and
current directors of the property developer Hill End Recreation Park
Pty Ltd (trading as Hill End Property Group) have given the ACCC
court-enforceable undertakings following alleged misleading or
deceptive conduct in the sale of land at Hill End, in central New
South Wales.
Between December
2003 and February 2004 the company, in advertisements in Sydney
newspapers, in brochures, and via its website, promoted the sale of
various sized blocks of land ranging from 80 square metres for $1,290
to one acre for $50,000. The company implied that freehold
title to blocks would be provided, that the land was suitable for the
building of dwellings, and a development application for building
permits was to be submitted to the local council.
The ACCC's
investigations revealed that individual buyers would not have
received freehold title to any block but rather 1/100,000 share of
the 12.5 hectares under subdivision. Further, the company did
not own the land proposed for the subdivision, rather the company
held an option to buy it, however that option was not exercised.
Consequently purchasers could not obtain title to a share of the
land. The ACCC also ascertained that local government
restrictions would prevent approval of subdivision of the land and
its use for the building of multiple dwellings.
The company's
directors, Mr Brendon Davenport and Mr Michael Braithwaite, have
acknowledged that consumers were misled by the actions of the company
and its representatives. They have given personal undertakings
to the ACCC to ensure all purchasers receive refunds. At least
$60,000 in deposits and payments, representing purchases exceeding
$160,000, were made by more than 30 consumers. Payments by
other purchasers are yet to be ascertained.
The company's
representative, Mr Chris Sharp, has had his authority to sell land on
the company's behalf revoked, and no longer acts for the company.
An Administrator has been appointed to the company.
Purchasers whose
details are held by the company will be contacted to arrange refunds
and the directors are still awaiting details of some consumers'
purchases from sales agents. The directors will also place
corrective notices in relevant press seeking direct contact from
certain consumers.
Consumers who do
not hear from the directors may seek a refund by providing proof of
payment to the company's solicitor Mr Joseph Kotowicz, Konstan
Lawyers, (02) 9558 3344.
The ACCC
acknowledges the cooperation of the company's directors in taking
action to satisfactorily resolve the ACCC's concerns.
"This is a
very satisfactory result for consumers who were misled when buying
the Hill End land", ACCC Chairman, Mr Graeme Samuel, said today.
"The ACCC has been conducting a successful crackdown on
misleading and deceptive conduct in the realty area.
"Today's
announcement is an important step in this campaign and indicates that
the high priority the ACCC places on consumer redress".
Section 52 of the
Trade
Practices Act 1974
prohibits businesses from engaging in conduct in trade or commerce
that is misleading or deceptive or is likely to mislead or
deceive.
Section 53A of the Act prohibits businesses from making misleading
representations concerning the nature of the interest in the land or
the use to which the land is capable of being put or may lawfully be
put.
PROPERTY
INVESTMENT PROMOTION
ACCC
institutes against Break Free Events over property investment
promotion
The Australian
Competition and Consumer Commission has instituted legal proceedings
against Giann & Giann Pty Ltd and its director, Mr John
Giannopoulos, alleging misleading and deceptive conduct over the
promotion of a Secrets
of a Real Estate Millionaire
property investment seminar.
Giann &
Giann Pty Ltd trades under the name Break Free Events and is alleged
to be responsible for advertisements which appeared in a number of
Australian newspapers in late 2003, advertising a "Free Event”
to be presented by property investor Mr Peter Flanagan.
The ACCC
has alleged that in the newspaper advertisements, as well as
brochures handed out to attendees of the free seminars advertising a
four-day course, the following representations were made:
- that attendees
of the free seminar would be given a unique formula of property
investment strategies that when implemented, were certain to produce
profit and wealth through investment in property and
- that attendees
of the four-day course who implemented the property investment
strategies taught would be likely to become wealthy by investing in
property, even if they had no money at the time they commenced to
implement the strategies
when, in fact:
- Giann &
Giann did not have reasonable grounds for making the representations
- the investment
strategies were not unique and did not consist of a formula that when
implemented was certain to produce wealth
- those who
implemented the property investment strategies were not likely to
become wealthy by investing in property, whether or not they had money
of their own at the time they commenced to implement the strategies and
- the strategies
were not actually taught at the free seminars.
The ACCC
further alleges that Mr Giannopoulos aided, abetted, counselled or
procured; and was directly or indirectly knowingly concerned in or a
party to Giann & Giann’s alleged misleading and deceptive
conduct in promoting the seminars and course.
The ACCC is
seeking:
- declarations
that Giann & Giann and Mr Giannopoulos have breached the Trade Practices Act 1974
- injunctions
restraining Giann & Giann and Mr Giannopoulos from publishing the
advertisements and making the representations;
- corrective
newspaper advertisements; and
- costs
A directions
hearing will be held.
PORT
BOTANY LEASE
No
ACCC action over Vopak Port Botany lease
The
Australian Competition and Consumer Commission will not take action
concerning the storage lease agreement between Vopak Terminals Sydney
Pty Ltd and the Shell Company of Australia to
store jet fuel and other petroleum products at the Vopak Terminal at
Port Botany, ACCC Chairman, Mr Graeme Samuel, said today.
"Concern
over access to fuel supplies arising from the introduction of tighter
fuel standards by State and Commonwealth Governments has had a noted
impact on the business of independent importers", Mr Samuel
said. "The ACCC's market inquiries have revealed that, as major
independents retailers have sought longer term contracts with the
domestic refiner/marketers in order to protect their operations,
independent imports have become less viable".
Mr
Samuel noted that the loss of these contracts made it difficult for
independent importers to develop a profitable business case for the
leasing of the Vopak facilities.
"During
the ACCC's inquiries concerns were expressed over the impact of
recent developments such as the supermarket alliances on the
independents'operations", Samuel said. "However, in
regard to the storage terminals at Port Botany, it is the ACCC's view
that the fuel standards have had a far greater impact as independents
have sought certainty of supply".
Shell
will acquire the 65,000 cubic metres of storage at Port Botany that
is currently leased to Trafigura Fuels Australia Pty Ltd, an importer
and wholesaler of leaded and unleaded petrol and diesel to
independent distributors and retailers. This lease expires at
the end of August 2004. Should the ACCC oppose the leasing of
the terminal space by Shell it is likely that the 65 000 cubic metres
storage would remain unused.
The
ACCC conducted market inquiries to determine the impact on
competition in the wholesale and retail petroleum markets and has
come to the view that that the Vopak/Shell arrangements would not
substantially lessen competition for the purposes of the Trade
Practices Act 1974.
Background
Vopak
currently leases terminal storage at Port Botany to Trafigura (65 000
cubic metres) and to Woolworths (35 000 cubic metres).
Trafigura's lease expires at the end of August 2004 and Woolworths'
lease expires in mid-2006. Trafigura, an independent importer
of petroleum products, brings in fuel to its own terminal at Hastings
in Victoria and to the
Port Botany terminal in New South Wales, which it leases from Vopak.
Since
January 2000 some State Governments and the Federal Government have
introduced tighter standards for fuel, which have constrained the
ability of independent importers to source fuel from the Asia-Pacific
region and to import fuel into Australia on
a commercial basis. Western Australia introduced
tighter fuel standards in January 2000, Queensland in
July 2000 and South Australia in March
2001. The Federal Government introduced tighter Commonwealth
fuel standards in January 2002 which were to be progressively
introduced to January 2006.
The
Commonwealth fuel standards that took effect from January 2004 relate
to the amount of olefins and methyl tertiary-butyl ether (MTBE) that
can be included in petrol. There was a degree of uncertainty
last year about whether fuel meeting these standards would be
available in the Asia-Pacific region from independent refineries.
This led to several larger independents, who previously sought fuel
from imports, changing their supply arrangements by contracting
significant supplies through the domestic refiner/marketers.
A
number of other developments have occurred in the petroleum market in
concert with the uncertainty surrounding the availability of imported
fuel able to meet the new Australian standards. These included
the alliances between a range of supermarkets and domestic
refiners/marketers, the closure of the Port Stanvac refinery in South
Australia, and forecast tightening of supply in the Asia-Pacific
region, including increased demand from China.
Overall
these changes have resulted in increased competition for retail
petroleum products, although this has been accompanied by a loss of
sales volume by many independents.
Contrary
to earlier concerns expressed by Trafigura in 2003, the ACCC
understands that in 2004 the company has been able to source fuel
meeting the new Commonwealth standards from China and
Taiwan. However, independent imports in the first half of 2004
(via Trafigura) have been very small, in the region of 2-3% of total
sales of petrol in New South Wales.
Trafigura's
lease of the Vopak terminal at Port Botany terminates at the end of
August 2004. Vopak has negotiated to lease the 65 000 cubic
metres of storage to Shell, which proposes to use it to store
imported jet fuel and petrol. There has been short supply of
both these products in the Sydney market in
recent times, as demonstrated by the highly publicised shortage of
jet fuel in Sydney in September last year.
Were
the ACCC to oppose the leasing of the 65 000 storage to Shell, it is
not clear that the storage capacity would be adequately used by
Trafigura, or any other independent importers, given the number of
major independent wholesalers and retailers who have entered into
supply agreements with domestic refiner/marketers for the next few
years. It is likely, therefore that the terminal capacity would
remain largely unused should the current proposal not proceed.
The
ACCC notes that while demand from independent wholesalers and
retailers for imported fuel is limited, this may increase in the
future as supply contracts come up for re-negotiation and the extent
to which fuel meeting the 2006 Commonwealth standards is
available in the Asia-Pacific region becomes clearer. In this
regard the ACCC notes that Vopak is prepared to build more terminal
capacity if demand warrants it.
The
ACCC also understands there are on-going discussions regarding the
availability of the 35 000 cubic metres of storage at Port Botany
currently leased to Woolworths.
AGENT'S
SELLING SCHEME
ACCC
institutes against land agent's selling scheme for misrepresentation
of ACCC approval
The Australian
Competition and Consumer Commission has instituted proceedings in the
Federal Court, Adelaide, against Set Sale Realty Pty Ltd and its
director Mr David Pilling for alleged false and misleading
representations made about the Pilling System, a real estate property
selling system.
Set Sale Realty
owns the trademarks 'Set Sale', 'Buyer Enquiry Range' and 'Buyer
Ranged' and trades under the name Pilling Systems. Set Sale Realty
promotes a real estate property selling system which uses these
trademarked terms and has licensing agreements with real estate
agents in South Australia, Victoria, New South Wales, the Australian
Capital Territory and Tasmania to use the system.
The ACCC alleges
that in January 2004 Set Sale Realty sent to its licensee real estate
agents an email and attached notice which claimed that the ACCC had
approved the Pilling System. The notice was designed to be used by
real estate agents in the information kits they provided to
prospective vendors.
The ACCC alleges
that the representations are false and misleading in breach of
sections 52 and 53(c) of the Trade
Practices Act 1974
because the Pilling System does not have ACCC approval as claimed.
The ACCC is
seeking court orders including:
- declarations
- corrective
advertisements
- injunctions
- a compliance
program and
- costs.
The matter has
been listed for a directions hearing in the Federal Court, Adelaide,
on 15 September 2004 at 9 a.m.
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