Consumer Protection and the Trade Practices Act 1974–1975 (CTH)

Date01 June 1975
Published date01 June 1975
DOI10.1177/0067205X7500600204
Subject MatterArticle
CONSUMER PROTECTION AND THE TRADE
PRACTICES ACT 1974-1975 (CTH)
BY
JOHN
GOLDRING*
While State legislatures have responded, to some extent, to
pressure
for
greater legal protection
of
consumers, consumer
protection had never been an area
of
legislative activity on a
national level until the passing of the Trade Practices
Act
1974-1975 (Cth). Mr Goldring examines the effect
of
the Trade
Practices
Act
1974-1975 (Cth) on the area of consumer protection
in Australia, and notes that the
Act,
in addition to introducing
regulation of restrictive trade practices on a scale beyond that
previously experienced in Australia, includes sweeping legislative
innovations aimed to protect consumers. The
Act
is
shown
to
prohibit certain types of undesirable commerical activity and gives
to a wide range
of
potential plaintiffs the right to take action
for
damages and injunctive relief. The terms implied by
law
into
contracts
of
sale
of
goods and hire-purchase are extended and
similar terms are included in other types of contract.
1.
INTRODUCTION
There has been considerable comment on those provisions of the
Trade Practices Act 1974-1975 (Cth) (hereinafter referred to
as
the
"Trade Practices Act") which are designed to deal with restrictive trade
practices and monopolies, and thus to supersede much of the Restrictive
Trade Practices Act
19
71-19 72 ( Cth) .1
The announced policy of legislation dealing with monopolies
is
to
reduce the ultimate cost to the consumer of goods and services by
ensuring efficiency and avoiding excessive profits by suppliers by enforc-
ing competition among suppliers. This
is
an essential part of any
legislative program designed to ensure that a consumer gets a fair deal
from an economic system in which he, unlike some suppliers,
is
in no
position
as
an individual to influence. Similar considerations, particularly
the relative weakness of the individual consumer and the relative
economic strength of the supplier, underlie the consumer protection
movement. The connection has not escaped the government, which has
included in the Trade Practices Act some far-reaching but relatively
unpublicised provisions intended to protect consumers.
*B.A., LL.B. (Syd.), LL.M. (Col.); Solicitor
of
the Supreme Court of New
South Wales; Barrister and Solicitor
of
the Supreme Court
of
Papua New Guinea
and
of
the Supreme Court of the Australian Capital Territory; Senior Lecturer in
Law, Australian National University.
1 Levine, "Aspects
of
the Trade Practices Bill 1973" (1973) 47 A.L.J. 679;
Baxt and Brunt, "The Murphy Trade Practices Bill: Admirable Objectives,
Inadequate Means" (1974) 2 Australian Business Law Review
1.
287
288 Federal
Law
Review
[VOLUME
6
Part V of the Act, which
is
in two substantive Divisions, deals with
consumer protection. The first deals with "unfair practices" and the
second with terms to be implied by law into consumer transactions.
These provisions, together with Part VI, which lays down remedies
available for contraventions of the provisions of the Act, attempt to
provide a code of protection for consumers which appears far wider than
anything currently in force in Australia. While parts of the Act are in
some ways similar
to
some provisions of State and Territory legislation,
they supersede and extend those provisions.
In
addition the Act provides
for speedy relief, efficient enforcement and meaningful sanctions for
breaches of its express provisions.
The Act embodies a code of commercial morality which reputable
business people should not
find
objectionable. Self-regulation
is
desir-
able, but
is
not sufficient to stop undesirable practices by unscrupulous
elements.
2.
THE
PHILOSOPHY
OF
CONSUMERISM'-
The consumer protection movement, which has already made its
mark on the statute books of the Auutralian States and Territories3 has
been described
as
a "band-aid on the malignancy of capitalism"." How-
ever, in Australia at least, capitalism in some form or another
is
likely
to be the basis of the economy for the foreseeable future. This would
seem to entail that individuals will be required to deal with large organ-
izations (i.e. state and private corporations) which have far greater
economic power than themselves. When introducing the Trade Practices
Bill 1973
(Cth)
into the Senate, the then Attorney-General, Senator
Murphy, showed that the Australian Government recognized this, for
his statement of policy on consumer protection was:
In consumer transactions unfair practices are widespread. The
existing law
is
still founded on the principle known
as
caveat
emptor-meaning
"let the buyer beware". That principle may have
been appropriate for transactions conducted in village markets.
It
has ceased to be appropriate
as
a general rule. Now the marketing
of goods and services
is
conducted on an organized basis and by
2 Trebilcock, "Consumer Protection in the Affluent Society" ( 1970)
16
McGill
Law Journal
263
provides a background to the ideological and philosophical
problems underlying the moves for legal protection for consumers. He refers to a
number
of
North American writings on the same subject.
3 N.S.W. Consumer Protection Act 1969-1972; Vic. Consumer Affairs Act 1972;
S.A. Consumer Credit Act 1972-1973 and Consumer Transactions Act 1972-1973
and Prices Act 1948-1974; Qld Consumer Affairs Act 1970-1974; W.A. Consumer
Affairs Act 1971-1975; Tas. Consumers Protection Act 1970; A.C.T. Consumer
Affairs Ordinance 1973.
4 An anonymous student, quoted in Layton and Holmes,
"Consumerism-A
Passing Malaise
or
a Continuing Expression
of
Social Concern?" (1974) 46 Aus-
tralian Quarterly (No.
2)
6,
15.
1975] Consumer Protection 289
trained business executives. The untrained consumer
is
no match
for the businessman who attempts to persuade the consumer to buy
goods or services on terms and conditions suitable to the vendor.
The consumer needs protection
by
the law and this Bill will provide
such protection.5
This statement seems particularly apt when it
is
applied to areas of
marketing and promotion of goods and services, which might be
described, in many cases,
as
the peddling to people who cannot afford it,
of a product which they do not need.
It
is
apt also to cover other sales
and promotion tactics which put undue social or other pressures on a
consumer. Once a consumer has decided, rightly or wrongly, that he
needs a product, he may
find
either that it
is
not suitable for his purpose
or that it
is
defective.
If
he seeks to recover either the price or compen-
sation
as
a result of the defect, legal costs which he cannot, but which
economically more powerful suppliers can afford, may present an
insurmountable barrier; or he may
find
that he
is
unable to satisfy an
evidentiary burden of proving his claim.
All these factors show a need to question the principle caveat emptor
as
a foundation for the legal principles of trade between individual
consumers and suppliers. There are other factors beyond the wants of
the individual which ought to be considered, such
as
a reappraisal of
social priorities in consumption, taking into account the fickle nature of
available resources and of the environment. A consideration of all these
needs shows that legislative regulation
is
required to ensure that
suppliers of goods and services consider the needs of the community
and of the individual consumer,
as
well
as
the profit motive. Self-
regulation of industry and a greater awareness of the rights and responsi-
bilities of consumers are also necessary; but legislation seems necessary
both to educate and to enforce
th~:se
priorities,
as
the existing law fails
to do so.6
The State laws relating to consumer protection show some acceptance
of the above propositions, but the fact that they have not been entirely
successful shows that there
is
a need for further action, and the Trade
Practices Act sets out to be the Australian government's answer
to
this
need, or at least a partial answer. By dealing with the problem of bigness
at the same time
as
prohibiting trade and promotional practices con-
sidered to be immoral or undesirable, the Act recognizes the links
between the economic power of the individual and his ability to protect
himself. For constitutional reasons the legislation
is
confined in most
cases to acts of corporations. This need not be a restriction. Consumer
frustration and inability to obtain a remedy
is
virtually confined to the
situation where the supplier
is
a corporation. "Bigness"
is
often a
5 S.Deb. 1973, Vol. 57, 1013-1014.
6 Layton and Holmes, op. cit. provide a general review
of
this question.

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