Australian Consumer Law - Case Study Example

Australian Consumer Law Introduction Brent and Kate had formed a contract for touring Canada with Rocky Tours. The tour consisted of a 20-day couch, train and river tour of Canada. Kate drowned in a Canadian river, whilst rafting, despite their having informed the tour guides that Kate was not a swimmer. Having a hard journey with rafts, Kate drowned in the river. Rocky Tours, despite their negligence towards tourists, claimed innocence based on the exclusion clauses in their tour application, which had not been noticed by Brent. For advising Brent, regarding his legal rights against Rocky Tours, the following issues need to be considered. Issues Whether Rocky Tours can rely on the exclusion clauses in the tour contract for limiting its liability. Whether Brent can have legal remedies under the Australian Consumer Law (ACL) against Rocky Tours for the losses suffered by him including the death of his wife, Kate. Rule of Law Consumers are provided with statutory protection under the law. This includes: Part 2-1, which deals misleading or deceptive conduct, Part 2-3, which relates to unfair contract terms, and Part 3-1, Division I, which addresses false or misleading representations, under the ACL. These apply to the provision of services and goods[Gib133]. Thus, Section 18 of the ACL, which is a component of Schedule 2 of the Competition and Consumer Act 2010 (Cth), disallows deceptive or misleading conduct in commerce and trade. Furthermore, it provides that certain specific conditions cannot be excluded in consumer transactions entailing the delivery of services of the sale of goods[Art17]. In addition, Section 64 of the ACL renders void any contractual term that aims to exclude, modify or restrict the right of consumers to rely upon the consumer guarantee regime. This legislation is based upon the rationale that businesses should not be permitted to circumvent certain obligations that are of advantage to the consumer. Although, a disclaimer could attempt to restrict or exclude liability against loss for reliance on the information provided, such disclaimer will be ineffective if the information is deliberately misleading or amounts to fraud. Application In our case, Brent had specifically informed Melody that his wife Kate could not swim, and consequently, they could not undertake rafting. Melody had assured them that they would not be inconvenienced by that portion of the tour, and that it would be suitable for both of them. Moreover, the itinerary had failed to include that portion of the tour. This served to indicate the fraudulent conduct of Rocky Tours, whilst forming the contract with Bent. In addition, Rocky Tours argued that they were not liable for any damages, based on the exclusion clauses in the contract. Exclusion clauses declare that a particular party to a contract will not be accountable for specific occurrences. Such clauses can be valid provided they had been included in the contract in a proper manner; and they are not contrary to the law. In order to be included properly in the contract, exclusion clauses cannot be added after the completion of the contract. If the exclusion clause is a part of the signed contract, then in the usual course it will be deemed to be part of the contract. In the absence of a signed contract, but where there are printed documents or symbols that specify the terms, these can be incorporated in the contract, provided they had been brought to the attention of the party prior to the formation of the contract. The courts accord the narrowest possible reading to exclusion clauses. In case of ambiguity, the courts adopt the interpretation that is most favourable to the consumer. In general, an exclusion clause does not cover a breach that had transpired outside the confines of the contract[Leg11]. In our present problem, one of the standard clauses of the contract had stated that the provisions of the ACL would not be applicable to the tours provided by Rocky Tours. As this is contrary to law, it is invalid and devoid of legal effect. Another clause had stated that, they would not be liable for any loss in anyway, including death or personal injury sustained during the tour. Nevertheless, adequate care has to be undertaken by businesses that deliver services and supply goods that fall under the ambit of the consumer guarantees provision of the ACL. A contractual term that attempts to exclude, restrict or modify the right to take recourse to the consumer guarantee regime, is rendered void by Section 64 of the ACL. However, Section 64A of the ACL allows modification of rights under certain circumstances. This enables suppliers to restrict the remedies available to consumers. However, the contract, in question, should pertain to goods or services that are not for domestic, household or personal use in the usual course. Thus, if a business is supplying business type goods to another business, the supplier can seek protection under this Section[Leg133]. In our present problem, the contract pertains to a tour, and the supplier of services, Rocky Tours cannot seek protection under section 64 A of the ACL. In addition, the court takes cognisance of several factors while evaluating whether the conduct in question is deceptive or misleading, and an exclusion clause or disclaimer is one of these factors. A disclaimer, in order to avoid being classified as being misleading or deceptive, has to communicate information or a qualification to the representee in a way that the latter is not misled[Chr092]. For instance, in Darlington Futures Pty Ltd v Delco, the High Court of Australia had ruled that exclusion clauses had to be interpreted by understanding the clause, as per its ordinary and natural connotation. In addition, the exclusion clause had to be read from the perspective of the contract, in its entirety[Asp03]. This would accord the clause with the due weight of its context. In Downey v Carlson Hotels Asia Pacific Pty Ltd, the hotel operator and the developers of a hotel complex made an attempt to evade liability for representations regarding the worth of investing in development projects that had been publicised through advertisement in a newspaper and two brochures. These were considered in the context in which they had appeared, by the court. Keane JA, while passing judgment in this case, held that the disclaimers could not erase what was misleading[Chr092]. The overall impression was held to be misleading. In our problem, the conduct of Rocky Tours conduct had been misleading, with respect to the assurance given to Brent, regarding the rafting portion of the tour. Moreover, in Keen Mar Corporation Pty Ltd v Labrador Park Shopping Centre Pty Ltd, as well as Waltip Pty Ltd v Capalaba Park Shopping Centre Pty Ltd, the court held that a disclaimer could not constitute a defence to a claim under the provisions of Section 52 of the ACL. All the same, it would be quite pertinent to enquire whether the applicant had been in fact been misled. Thus, courts evaluate the circumstances to ascertain whether the applicant had essentially depended upon the representation or the silence, whilst forming the contract[Coc96].Upon establishing that the conduct had been relied upon by the applicant, the other party to the contract will be deemed to have breached the law. Furthermore, in Gibaud v Great Eastern Railway Co, it was held that a bailee who acted in a manner that was alien to the relevant contract after obtaining possession of the goods, would not be relieved of liability for loss of such goods. This rule was upheld in Thomas National Transport (Melbourne) Pty Ltd v May & Baker (Australia) Pty Ltd, by the High Court of Australia, and applies whenever a serious breach of contract transpires. As such, an exclusion clause cannot encompass an act that is neither permitted nor authorised by the contract’s primary object. For instance, in The Council of the City of Sydney v West, the Council was unable to rely on the exclusion clause, when the plaintiff’s car, parked within its paid car parking facility, had been stolen. The court held that this exclusion clause failed to cover the conduct of the Council and that it was liable. Similarly, in our case, the rafting portion of the contract had not been specified in the itinerary. Consequently, it cannot be regarded as having been included in the contract. Hence this clause is invalid according to law. Conclusion According to the above discussion and case law, Rocky Tours cannot evade liability on the basis of exclusion clauses, since the said clause in their contract contravenes the provisions of Australian Consumer Law. In addition, Brent had informed Melody that they wanted a tour that was less strenuous, and that Kate could not swim. Brent was assured by Melody that they would not be troubled by the river tour. This assurance constitutes fraudulent misrepresentation according to the ACL. Brent had signed the application for the tour, without noticing the exclusion clauses. For claiming a defence under the exclusion clause, the latter should have been incorporated into the contract and should have been brought to the notice of the other party which had not been done in our case. As such, Brent can approach the court for redressal against Rocky Tours for the losses suffered by them due to the inconveniences in the tour programme, and the death of Kate by drowning, under the provisions of the law. As such, under the provisions of the ACL, Brent can claim damages for breach of contract, misrepresentation, and losses suffered by him due to the fraudulent behaviour of Rocky Tours. References Gib133: , (Gibson & Fraser, 2013, p. 512), Art17: , (Arts Law Centre of Australia, 2017), Leg11: , (Legal Services Commission of South Australia, 2011), Leg133: , (Legal Services Commission of South Australia, 2013), Chr092: , (Christensen & Duncan, 2009, p. 80), Asp03: , (Asprey, 2003, p. 214), Chr092: , (Christensen & Duncan, 2009, p. 82), Coc96: , (Cockburn & Wiseman, 1996, p. 116), Read More