Business Law of OPR WA Pty Ltd v Marron †MyAssignmenthelp.com

Question: Discuss about the Law of OPR WA Pty Ltd v Marron. Answer: In the case of OPR WA Pty Ltd v Marron [2016] WASC 395 it was provided by the supreme court of west Australia that a contract for the sale of land would only come under the provisions of the Australian Consumer Law as established by Schedule 2 of the Competition and Consumer Act 2010, if the land is acquired for a household purpose[1]. In case the land has been purchased by the buyer for the purpose of investment it cannot be considered as a consumer contract under the ACL[2]. Thus the decision of the court signifies that all land purchased for residential and household purpose come under the provisions of the ACL. The ACL provides consumer guarantees to the buyers along with the imposition of a few restrictions on the sellers with respect to the way in which they carry out their business functions. The restrictions are related to the indulges in a misleading or deceptive conduct, bait advertisements and use of unfair terms in a consumer contract. The purpose of this paper is to disc uss the impact of ACL on the sale of land in relation to misrepresentation and unfair contract terms. Misrepresentation In the case of Williams v Pisano[2015]NSWCA 177 the issue before the New South Wales court of appeal was to determine whether a seller of a private home admitting misrepresentation with respect to the quality of the house is liable under the provisions of misleading and deceptive conduct as provided by the Australian Consumer Law[3]. Along with the issue the court also considered the proportionate liability regime as provided by Part VIA of the legislation. In this case the seller of the property was the owner 0f the building so the responsibility of any defective work to the building carried out by her was imposed on her. The seller and his wife were the owner of a plot for many years and they decided to renovate it. A builder permit had been obtained by the wife and consultants had been engaged by her to initiate a plan along with a builder based on cost plus payment. The renovation of the property was done by the builder under the supervisions of the wife but with no detailed arch itectural supervision. An advertisement had been made by the vendors for the sale of the property. In order to assist for the sale a real estate agent had been engaged. The wife projected herself as an interior designer. It was represented by the sellers and the agent to the purchaser that the renovation of the property had been carried out in the best possible way without ignoring any expenses. After the sale of the property it had been found out by the purchaser that a number of short cuts had been taken while the renovation process and it resulted in significant defects and a major problem of water penetration. In this case it was found by the trial judge that the cost to rectify the damages was $1.2 million. He trial judge without any difficulties ruled that the wife had been liable for the violation of warranties provided by her as the owner of the building. The purchaser had also made a claim against the husband under the provisions of ACL as he was not liable under the warranties. It was held by the trial judge with respect to the claim that the representation which had been made by William was with respect to trade and commerce and ruled a judgment against the husband of a penalty of $1.7 million. It was held by him that there was a joint liability on each of the vendors. The decision of the trial court was appealed against by the husband. The following grounds of appeal were submitted before the court including that the representation of the vendor had not been made in trade or commerce and thus the ACL was not applicable[4], A person within the scope of trade and commerce is prohibited from indulging in a conduct which may cause misrepresentation through a misleading or deceptive conduct as provided by Section 18 of the ACL. An extreme wide variety of conduct is covered through the scope of this section with respect to various industries and has been considered for various judgments commentary and books. As provided by section 30 of the ACL a business or person is not allowed to make a misleading or false representation with respect to sale or probable sale or promotion of a property in land. The act may be in relation to the affiliation, approval, sponsorship of individual by whom the statement is made, the characteristics of the benefits in land, the location, the price , the characteristic, the allowed use and the facilities which are available with the land. The section is applicable when the representation has been carried out in relation to dealing for sale of land. The scope of what may be considered as a representation which is false and misleading have been discussed by the court in the case of Given v Pryor (1979) 39 FLR 437[5]. In this case the court provided that representation is not restricted to a mere verbal statement but can also exist in a oral or written statement, implication of words, photographs, plans, drawings and maps along with demeanor , gestures and other conducts. Silence with respect to a fact which is relevant is also considered as form of misrepresentation this may be most obvious in circumstances where silence can have a detrimental effect on the purchaser. In addition it was provided by the court in the case of Latella v LJ Hooker Ltd(1985) 5 FCR 146 that it is not compulsory to only sue a person who has made a representation but a claim can be brought by the plaintiff if he can only prove that the misrepresentation has resulted in his losses[6]. In the case of Given v CV Holland (Holdings) Pty Ltd(1977) 29 FLR 212 it was ruled that a false representation is an act of providing information inconsistent with the real facts[7]. Thus there is no requirement that the wrongdoer must have the intention of making false representation. Thus even if a land seller believes that the information provided by them is true they would not be able to escape the liability in relation to misrepresentation[8]. In addition whether a misrepresentation has been made on not the total representation which was made by the defendant has to be taken into consideration by the court as provided in the case of Taco Co of Australia Inv v Taco Bell Pty Ltd (1982) 2 TPR 48. The court further ruled that no party is liable to choose and pick a particular statement of the purpose of establishing misrepresentation. Therefore when it comes to the sale of land the same rules of misrepresentation are applicable on the vendors of land as discussed above in relation to the contract for the sale of land. In the case of Australian Equity Investors, An Arizona Ltd Partnership v Colliers International (NSW) Pty Ltd (No 4) [2011] FCA 442 it had been provided by the court that the provisions of Section 30 of the ACL had been breached by valuation as it made misleading and false statement related to the payable price for the land. In the case of ACCC v Gary Peer Associates Pty Ltd[2005] FCA 404 it was found by the cou rt that section 53A of the Trade practices Act which is not effective as section 30 was violated by the defendant as when a less amount was advertised by the vendor as compared to the actual amount he intended to sold sell the property. Unfair Contract Terms The recent initiation of the Trade Practices Amendment (Australian Consumer Law) Bill (No.2) 2010 provides that businesses dealing with properties have to review the contractual terms in order to avoid the terms of the contract being declared as void. All property business is now subjected under the ACL as effective from 1st January 2011[9]. The new law is applicable on those transactions which take place after 1st January 2011. Through the new law restrictions have been imposed on the businesses in relation to the inclusion of unfair terms in standard form of consumer contracts. With respect to the sale of land consumers are often made to sign standard contracts. The new provisions related to unfair contracts terms objects to making transparent contracts in relation to consumer transactions so that they can appropriately address the risk which may arise in relation to such contracts. The terms would also prevent the business from adding terms which may be unfairly detrimental to the interest of the consumers. However since 12th November 2016, the provisions of unfair terms are also applicable on new standard form small business contracts which have been renewed or entered into. The primary limitation which have been introduced into the property business through the introduction of section 23 of the ACL are that a term would be deemed to be void it is unfair and detrimental to the interest of the consumers and if it is a standard form of contract. In addition, the provisions of ACL are only applicable on transactions which are below the value of $40000 or are for household and non commercial purposes. Thus if the sale of land is for household purpose the provisions of unfair terms are applicable on the contract. The definition of interest in land is provided through Schedule 1, section 2 of the Australian Competition and Consumer Act 2010 (Cth). According to the definition the interest in land is a equitable of legal estate in land, the occupancy right in the land or a building erected on it, shares of a company which owns a land, a power, right or privilege held in relation to a land. The provisions of ACL are not applicable on business contracts. In addition the applicability of the provisions in relation to unfair terms is only limited to standard form of contracts. However as provided by section 27(1) of the Act a standard form of contract has to be proved not to be one in order to consider the contrary. The burden of proof is on the seller to prove that the contract was actually negotiated. Various factors which have been provided through Section 27(2) have to be taken into account by the courts in determining a standard form of contract. all contracts are considered as standard for of contract until the seller is able to prove the contrary. After it has been determined by the court that the contract is actually a standard form of contract the principles of unfair terms as provided in section 24 of the ACL are applicable. The terms of a consumer contract is declared to be unfair in case it causes a lack of balance in the obligations and rights of the parties under the contract, it is not necessary to safeguard the interest of the party who is provided benefits by the term and it would result in non financial or financial disadvantage for a party if they are used included in the contract. Thus while making contract for the sale of land the businesses have to ensure that they do not add any terms into the contract such as term through which the rights of a party as compared to the others are restricted, terms through which only one party may repudiate the contract, terms setting out penalties only for one party and not the other, variation clauses which are allowed only by one party, term allowing unilateral variation of interest in land and terms limiting the right of the parties towards legal actions. In addition terms such as assignment clauses without the consent of the other party are also considered to be unfair[10]. The property business must also be aware of a few exceptions which have been imposed on the principles of unfair terms. The exceptions are provided through the section 26 of the ACL. The section states that the limitations provided by section 23 are not applicable in case the set out the primary subject matter in relation to the contract defines the upfront payable price with respect to the contract or are expressly allowed by a law in Australia. The case of ACCC v Bytecard Pty Ltd 2013 was the initial legal case in relation to the new unfair terms provisions under the ACL where the Australian Completion and Consumer Commission gained victory against the defendant company in relation to the sale of an interest in land[11]. The form of contracts which comes under the provisions of unfair terms in context of property are contracts for the sale of land by the developers who have the intention to reside in the property and use it as their primary place of living. When it comes to contract for lease, those leases which have been provided for the purpose of domestic uses also come under the provisions of section 24. Contracts which provide any interest to an individual in relation to a land for the purpose of domestic use such as easements are also considered under section 24. In the case of Director of Consumer Affairs Victoria v Craig Langley Pty Ltd Matrix Pilates and Yoga Pty Ltd (Civil Claims) it was held that a contract which has been duly negotiated by the parties cannot have a term which can be declared as an unfair term[12]. In the case of Director of Consumer Affairs Victoria v AAPT Ltd (Civil Claims) [2006] VCAT 1493 it had been ruled by the court that if in addition to an unfair term a term is added to the contract in favor of the consumer may counter balance the unfair term in case the consumer does not have knowledge about them[13]. These terms may be inform off implied terms or those which are added in fine prints. Appropriate steps have to be taken by the property businesses so that they become aware of the rules which have been imposed on them by the recently developed ACL in particulars to unfair terms so that terms in the contract are not judged as unfair. In case the court finds the term of a contract to be unfair, the parties whose rights have been violated have the option of rescinding the contract. However if the contract can still be applicable if such term is removed from the contract the court orders the contract to be still binding but removes such unfair terms from the contract[14]. Concluding the paper it can be stated that the Australian consumer law has become more strict when it comes to the sale of land for household and domestic purpose protecting the rights of the consumers. The businesses must be aware of the consequences of unfair terms and misrepresentation with respect to consumer contracts with sale of land in order to avoid legal liabilities. References ACCC v Bytecard Pty Ltd 2013 ACCC v Gary Peer Associates Pty Ltd[2005] FCA 404 Australian Competition and Consumer Act 2010 (Cth) Australian Equity Investors, An Arizona Ltd Partnership v Colliers International (NSW) Pty Ltd (No 4) [2011] FCA 442 Corones, S. (2014). Australian Competition and Consumer Commission v. TPG Interney Pty Ltd., Forrest v. Australian Securities and Investments Commission: Misleading Conduct Arising from Public Statements: Establishing the Knowledge Base of the Target Audience. Melb. UL Rev., 38, 281. Director of Consumer Affairs Victoria v AAPT Ltd (Civil Claims) [2006] VCAT 1493 Director of Consumer Affairs Victoria v Craig Langley Pty Ltd Matrix Pilates and Yoga Pty Ltd (Civil Claims) Given v CV Holland (Holdings) Pty Ltd(1977) 29 FLR 212. Knake, R. N. (2014). Legal Information, the Consumer Law Market, and the First Amendment. Latella v LJ Hooker Ltd(1985) 5 FCR 146 Miller, RV 2013, Millers Australia Competition and Consumer Law Annotated, 35th ed, Thomson Reuters, Pyrmont, New South Wales. Parker, C., De Costa, J. (2015). Misleading the ethical consumer: The regulation of free-range egg labelling. Melb. UL Rev., 39, 895. Pearson, G. (2017). Further challenges for Australian consumer law. InConsumer Law and Socioeconomic Development(pp. 287-305). Springer, Cham. Taco Co of Australia Inv v Taco Bell Pty Ltd (1982) 2 TPR 48 Thampapillai, D. (2015). THE AUSTRALIAN CONSUMER LAW.Australian Commercial Law, 374. Trade Practices Amendment (Australian Consumer Law) Bill (No.2) 2010 Webb, E. (2016). Unfair terms and small businesses.Australian consumer law,31(1).