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Federal Court judgments

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Consumer law and practice and procedure

Unfair contract terms – summary dismissal application – whether finding that terms are unfair is possible without identifying particular contracts between identified parties 

In Australian Competition and Consumer Commission v Fuji Xerox Australia Pty Ltd [2021] FCA 153 (3 March 2021) the Court dismissed the interlocutory application for summary dismissal of the proceeding brought by the respondent (FX). 

The applicant (ACCC) sought declarations and injunctions concerning the use by FX of nine different template forms of contract with its customers which were said by the ACCC to be “small business contracts” within the meaning of s23(4) of the Australian Consumer Law (ACL) (Sch 2 to the Competition and Consumer Act 2010) and “standard form contracts” within the meaning of s27 of the ACL. The ACCC’s case was that a number of the terms of the template form contracts were “unfair terms” within the meaning of s24 of the ACL. The ACCC also relied on analogous provisions of the Australian Securities and Investments Commission Act 2001 (Cth).

FX submitted that the ACCC’s case was fundamentally flawed because (other than in an amendment to the relief in an amended originating application) it did not identify any particular contract between FX and any particular customer (at [16]). It argued that it was impossible to apply the relevant provisions to any given “contract” unless the contract in question had been identified (at [13]-[14]). FX submitted the Court was impermissibly being invited to give an advisory opinion on wholly abstract questions, namely whether if a term of the kind which appears in FX’s template document features in a contract which happens to have the characteristics of a standard form contract and happens also to satisfy the requirements for a small business contract, would that be an unfair term within the meaning of s24 of the ACL (at [16]; see also [40]).

Stewart J considered that an obstacle to FX in advancing its argument was that courts had on previous occasions ordered similar relief to that which was sought in this case, referring to ACCC v JJ Richards & Sons Pty Ltd [2017] FCA 1224 and ASIC v Bendigo and Adelaide Bank Ltd [2020] FCA 716 (at [41]-[56]). The application for summary dismissal was dismissed. The Court held it is possible under the statutory scheme that the impugned terms were unfair notwithstanding that no actual contracts between identified parties were proved (at [57]). The relief sought was not too uncertain (at [59]-[64]). Further, the relief sought by the ACCC would decide a real controversy, being the controversy between the ACCC (as “regulator” referred to in s250(2)(b) of the ACL) and FX with regard to whether the impugned terms in the identified template contracts were unfair (at [65]). The criticisms of the relief that FX made were not being finally dealt with at this stage. Rather, Stewart J was not satisfied at this stage that there is no reasonable prospect that the relief that is sought will ultimately be granted (at [66]).

Equity and human rights 

Discrimination and sexual harassment allegations – claim of vicarious liability of the Commonwealth – whether the Commonwealth restrained from unconscientious reliance on legal rights based on general words in Deed of Release 

In Leach v Commonwealth of Australia [2021] FCA 158 (2 March 2021) the Court considered the equitable principle in Grant v John Grant & Sons Pty Ltd [1954] 91 CLR 112 by which equity will restrain a party from unconscientious reliance on legal rights based on general words in a release.

The applicant (Ms Leach) was employed by the second respondent, a former Senator of the Commonwealth on behalf of the first respondent (the Commonwealth). Ms Leach claimed that her former employer discriminated against her on the ground of sex and engaged in sexually harassing conduct in contravention of ss5, 14, 26, 28A, 28G(2) and 28L of the Sex Discrimination Act 1984 (Cth). She also claimed that the Commonwealth was vicariously liable for the actions of the former Senator in accordance with s106 of the Act. Following an unfair dismissal claim by Ms Leach, there was a Fair Work Commission conciliation that ultimately led to Ms Leach signing a Deed of Release made on 16 January 2019 (Deed), by which Ms Leach released the Commonwealth from any “Claims” arising out of, or any way related to her former employment settling and bringing to an end the unfair dismissal claim. 

The question arose as to whether the release in the Deed barred Ms Leach’s subsequent claims against the Commonwealth for vicarious liability for the discrimination and sexual harassment alleged against the former Senator for whom she was previously employed. More specifically, the Court determined a separate question directed to whether or not Ms Leach was entitled to declaratory relief against the Commonwealth in relation to the Deed. It was common ground that if Ms Leach was entitled to the declaration, then she would be entitled to pursue her other substantive claims against the Commonwealth; if she was not entitled to the declaration (meaning the Deed was able to be enforced according to its terms), she would be prevented from maintaining her claims in relation to sexual harassment against the Commonwealth and her proceeding against the Commonwealth must necessarily be dismissed.

Ms Leach, as the moving party, bore the onus of establishing that the reliance by the Commonwealth on the legal terms of the Deed would, in all the circumstances, be contrary to conscience such that equity would intervene (at [19]; see also [23]). Lee J found that Ms Leach did genuinely (but mistakenly) believe that in signing the Deed, this step would not prevent her maintaining the claims that she wished to pursue (at [41]). However Lee J explained (at [42]): “To state the obvious, however, this is a necessary but not sufficient basis upon which Ms Leach seeks relief. The objective theory of contract stands in command of the field: Taylor v Johnson [1983] 151 CLR 422 (at 429 per Mason ACJ, Murphy and Deane JJ). Although I am prepared to accept Ms Leach was operating under a genuine misapprehension, her mistake was entirely unilateral and her subjective misapprehensions as to the nature of the bargain she struck with the Commonwealth, without more, are neither here nor there. The inquiry relates to the state of knowledge of both parties concerning the existence, character and extent of the liability in question (as well as the actual intention of Ms Leach): Grant (at 129–30 per Dixon CJ, Fullagar, Kitto and Taylor JJ). Hence, the real question for me in the present circumstances is whether the misapprehensions: (a) were known to be held by Ms Leach by representatives of the Commonwealth; and/or (b) came about by reason of some action or conduct of the Commonwealth which renders the Deed being enforced according to its terms by the Commonwealth as being contrary to conscience”. 

The Court found that Ms Leach fell well short of proving, in accordance with s140(1) of the Evidence Act 1995, the factual premises on which her claim for declaratory relief was based (at [43]-[44]). Consequently, the Deed could be enforced in accordance with its terms and the proceeding against the Commonwealth was dismissed (at [47]).

Evidence

Admissibility of prior written statements 

In Australian Building and Construction Commissioner v Albert [2021] FCA 168 (3 March 2021) the Court ruled on certain objections to evidence in the proceeding. Some of the applicant’s witnesses gave evidence in chief by affidavit, which affidavits referred to and annexed copies of earlier statements. The respondents objected to evidence of this nature as being prior statements made to the applicant (category 1 evidence) and prior statements written, or purportedly written, by the deponent after the relevant events (category 2 evidence).

The objections of the respondent included that these statements were an attempt to bolster the credibility of the relevant witnesses and were thereby inadmissible. The applicant submitted (inter alia) that the statements were not included in the affidavits as an attempt to bolster the credibility of the respective witness. The witness was, in essence, adopting the veracity of statements he had earlier made, as evidence in chief.

The Court considered various authorities as to the relevance of and admissibility of prior written statements (at [11]-[31]). Having done so, the Court held the evidence to which objection was taken admissible for reasons including the following:

The category 1 evidence and the category 2 evidence was relevant under s55 of the Evidence Act 1995 (Cth) (at [33]).

The evidence was deposed by way of evidence in chief of the relevant witnesses. It was not evidence subsequently sought to be adduced by the applicant as credit evidence to counter allegations of invention or reconstruction, and therefore was distinguishable from cases such as The Nominal Defendant v Clements [1960] 104 CLR 476 and Humphries v The Queen [1987] 17 FCR 182 (at [34]). 

Authorities establish that s37(3) of the Evidence Act 1995 anticipates that a previous statement of a witness (such as those statements in categories 1 and 2) can be adopted by the witness as true and correct, and as evidence in chief, of that witness (at [35]-[36]).

There being no live issues of credit in the case in respect of the applicant’s witnesses, it was difficult to see any inherent unfairness in ruling the evidence admissible (at [37]-[38]).

The impugned evidence was not inadmissible as credibility evidence within the meaning of s101A of the Evidence Act 1995 (at [43]-[44]).

The impugned evidence was not hearsay. Collier J explained (at [45]): “To paraphrase Bromwich J in Australian Competition and Consumer Commission v Australian Institute of Professional Education Pty Ltd (No 2), the adopted written statements and file notes were no more hearsay than they would be if the text of that adopted material was instead simply copied into the adoption affidavit, but with the loss of the greater contemporaneity of the prior written account”. ■


Dan Star QC is a Senior Counsel at the Victorian Bar, ph (03) 9225 8757 or email danstar@vicbar.com.au. The full version of these judgments can be found at www.austlii.edu.au. Numbers in square brackets refer to a paragraph number in the judgment.


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