to Introduction Business
Law
Law
Unit Number 200184
Unit
Autumn Session 2009
Lecture11
ConsumerProtectionLaw&CriminalLaw
(TextbookChapters2325+5)
Reminders
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MainTopics:
MainTopics:
PartVATPAProductLiability
PartVCTPAOffencesRelatingtoUnfair
Practices
PartVITPA(sections75Bto87A)
Enforcement&Remedies
CriminalLawinaBusinessContext
Civil Remedies for Breach of Part
V
Theissuingofaninjunction(s.80);
Disclosureofinformationorcorrective
advertising(s.80A);
Damages(s.82)(butnotforbreachof
PartIVA);
Ancillaryorders(s.87)
Assetfreezing(s.87A)
Enforcement
Enforcement
S75Bpermitsadamagesorderoran
ancillaryorderunders87tobemade
againstapersonwhoaids&abetsa
contraventionofPartsIVA,VorVC
Section84statesthattheconductofa
director,agentoremployeewithintheir
actualorapparentauthorityisdeemedto
bethatofthecompany.
Criminal Sanctions for Breaches
of Part VC
of
ProsecutionbyACCC(Australian
CompetitionandConsumer
Commission)foroffencesinPartVC
TPA(duplicatesfalserepresentations
inss5360)
Mayresultinafine(s.79)
ForCorporations$1.1million
(10,000penaltypoints)
Forindividuals$220,000
Case Study: False or Misleading
Representation about Price
Representation
In1996,CueDesignsoldalineofclotheswith
pricetagsshowingtheoriginalpricecrossedout
andalowerpriceinserted.
Theallegedsavingsrangedfrom$15to$56.
Howevertheitemshadneverbeenofferedfor
saleatthehigherprice!
Cuewasfined$75,000.
(TradePracticesCommissionvCueDesignPty
Ltd(1996))
Defences for Breach of Part VC
Defences
S85providesadefencetocriminalactions:
S85providesadefencetocriminalactions:
Reasonablemistake;or
Reasonablerelianceoninformationsuppliedby
anotherperson;or
Thatthebreachwascausedbyathirdparty,
accidentorsomeothercauseoverwhichthe
defendanthadnocontrol;and
Ineachcasethedefendanttookreasonable
precautionsandexercisedduecaretoavoidthe
breach.
Product Liability Part VA
Product
STRICTLIABILITYonmanufacturersand
importersofdefectivegoodsthatcause
personalinjuryorpropertydamage.(s
75AD)
Compensationforinjuredpartynoneed
toprovenegligenceonthepartofthe
manufacturer.
Product Liability Part VA
Product
Goodswillbedefectiveiftheirsafetyisnot
suchaspersonsaregenerallyentitledto
expect.
Objectivetest
Product Liability Part VA
Product
Indeterminingthesafetyofthegoods,the
courtscanlookat:
Themannerin,andpurposes,forwhichthegoods
havebeenmarketed;
Packaging;
Theuseofanymark;
Instructionsorwarnings;
Whatcouldreasonablybeexpectedwouldbedoneto
thegoods;
Thetimeofsupply.
Part VA Defences S 75AK
Part
Postsupplydefect;
Compliancewithamandatorystandard;
Stateoftheartdefence
Componentofothergoodsandthedefectwas
onlyattributabletothedesignofthefinished
product.
Case Study: ACCC v Glendale
Chemical Products Pty Ltd (1998)
Chemical
MrBarnesboughtsomeGlendaleCausticsoda
tounblockadrain
Thelabel
Didnotwarnofthedangerofreflux
Didnotwarnagainstusingtheproductwithboiling
water
Didnotadviseconsumerstowearprotectiveclothing
Hewasburntonhisfacewhenheusedit
Glendalewasliableunders75AD
Criminal Law
Criminal
IndictableOffences:Moreseriousegmurder,
robbery.
SummaryOffences:lessseriousegassault,being
drunkanddisorderly.DealtwithbyaMagistrate
(summarily)ratherthanajudgeandjury.
Committal Proceedings
Committal
Forindictableoffences
PreliminaryhearinginLocalCourttodetermineif
thereisenoughevidencetosendtheaccusedfor
trialinahighercourtbeforeajudgeandjury.
Themagistrateusuallyhearsthecommittalonthe
basisofsubmissions,withoutwitnessesbeing
called.
Role of Police
Role
ThePoliceinvestigatecrimeand
commencecriminalproceedings.
Theyprosecutesummarymattersinthe
localcourt(exceptforsexualassaultupon
achildorprosecutionofapoliceofficer).
Seriouscriminalmattersarereferredto
theOfficeoftheDirectorofPublic
Prosecutions(theODPP)toprosecute.
Office of the Director of Public
Prosecutions (the ODPP)
Prosecutions
IndependentStateprosecutionauthority
Prosecutesallseriousoffencescommitted
againstthecriminallawoftheState.
Doesnotinvestigatecrime.
Doesnotrepresentvictims,itconducts
prosecutionsonbehalfofthecommunity.
Elements of a Crime & Proof of a
Crime
Crime
Awrongfulact(theactusreus);and
Aguiltymindwhichmayinvolveintention
(mensrea),foresight,knowledgeor
awareness.
TheburdenofproofisupontheCrown(R).
Thestandardofproofisbeyondreasonable
doubt
Defences
Defences
Theaccusedmay:
denytheconductnotguiltyplea;or
Criminal
Responsibility
Responsibility
Ifapersonwhocommitsacrimeinthe
courseofthebusinessofthecompany,is
sufficientlyseniorinthecompanytoform
partofthedirectingmind&willofthe
company,thenthec raiseadefenceeg.selfdefence,duress.
Corporateompanycanincur
criminalliability.
Acorporationisalegalperson
lacksabody&mindimpositionof
finesservesapunitivepurpose
Corporate Crime
Corporate
TheCriminalCodeAct1995(Cth)setsout
specificcriteriawhenitwillmakemakes
companiescriminallyliable.
Individualsconnectedwiththe
managementofacompanymaybeliable
forbreachesimposedbytheCorporations
Act2001(Cth).
Case Study: The Longford Esso
Gas Explosion
Gas
2workerswerekilled&8injuredinan
explosionattheEssoAustraliaLongford
GasPlant.G
Gassuppliestomorethan1millionhomes
&businesseswerecutfor2weeks.
ARoyalCommissionblamedcostcutting
&inadequatetrainingbyEsso
$2millionfineimposedonEssofor
breachingsafetylaws.
White Collar Crime
White
Whitecollarsounds
innocuous!
A crime committed by a
person inside a business or
government
organisation
where the person takes
advantageoftheirprofessional
or clerical position in order to
carryoutthecrime.
Examples of White Collar Crimes
Examples
Embezzlement/Misappropriation
Fraudulentconversionofpropertybyapersonto
whomthepropertywasentrusted.egfalsificationof
accountingbooksandrecords.
Bribery
Whenonepersongivesanotheranythingofvaluein
returnforsomeadvantageorpreferentialtreatment.
Insidertrading
Involvestheuseofpricesensitiveinformation
whichisnotpubliclyavailable.
Computerrelatedcrimes
Insider Trading
Insider
FewprosecutionsinAustraliafewer
succeed.
Pricesensitiveinformationrelatesto
matterswhichwouldaffectthepriceof
sharesorothersecuritiesofthe
company.
Usuallyobtainedasaresultofhavinga
connectionwithacompany.
Insider Trading: Case Study
Insider
In2001,ayoungexecutiveatMacquarieBank
receiveda21/2yearsentence.
Hehadgainedmillionsthroughhisunlawful
conduct.Hehadusedfalseidentities,falsebank
accounts&forgerytoconcealhisconduct.
Theinsideinformationconcernedmattersin
whichMacquarieBankwasinvolved.
Insider Trading: Case Study
Insider
In2003,ninemonthsofweekend
detention&$30,000finewasimposedon
ReneRivkin,aSydneystockbroker.
Hehadbought50,000Qantasshares
hoursafterhearingofapotentialmerger
betweenQantasandImpulseAirlinesfrom
theImpulseexecutivechairman.
Rivkinmakea$346profitonthedeal.
Computer Related Crimes
Computer
Newwaysofperpetratingoldcrimes.
Computertechnology:
lendsitselftotraditionalwhitecollarcrimeslike
embezzlement.
Facilitatesaccesstopersonalaccountssuchas
bankaccountsandtheunauthorisedtransferof
funds.
Facilitatesindustrialespionage
Case Study: R v Stevens [1999]
Stevens
NSWCCA 69
NSWCCA
Stevens,acomputerhackerusedanother
personsaccount&passwordtogainaccessto
thehomepageofacompany.
Heinsertedamessageindicatingamongother
thingsthatthecreditcarddetailsofsiteusers
werenotbeingsecurelystored.
HepleadedguiltytoabreachoftheCrimesAct
(Cth)butsaidhewasjusthadbeencomputer
spraypainting.
Hewassentencedto3yearsimprisonment.
Revision Question
Revision
1)TheprovisionsofPtVAoftheTrade
PracticesActmay:
a) Notbeavoidedbyadisclaimer
b) Beavoidedbyadisclaimer
c) Notapplytocorporations
d) NotapplyinTasmania
Answer
Answer
?
Question
Question
2)TheaimofdamagesundertheTradePracticesAct
is:
a)
Toputtheinnocentpartyinthepositionheorshe
wouldhavebeeniniftheagreementhadbeen
carriedoutproperly
b)
Toputtheinnocentpartyinthepositionheorshe
wouldhavebeeniftheycausedthenegligentact
c)
Toputtheinnocentpersoninthepositionthey
wouldhavebeeninbutforthebreachofthe
relevantsection
d)
Toputtheinnocentpersoninthepositionthey
wouldhavebeeniniftheyhadfulldisclosureof
theconduct
Answer
Answer
?
Question
Question
3)InthecaseofTheCommercialBankof
AustraliavAmadiothecourtfoundfor:
a)
Theplaintiffonthebasisthattheywere
underaspecialdisability
b)
Thedefendantonthebasisthattheywere
underaspecialdisability
c)
Theplaintiffonthebasisthatsection52of
theTradePracticesActhadbeenbreached
d)
Thedefendantonthebasisthatsection52
oftheTradePracticesActhadbeen
breached
Answer
Answer
?
Question
Question
4)Anattempttopreventatermbeing
impliedbytheTradePracticeActwill
resultinthattermbeingdeclared:
a) Valid
b) Void
c) Voidable
d) Valuable
Answer
Answer
?
Question
Question
5)Whichifthefollowingstatementsisalwaystrue:
a)
MerchantablequalityisdefinedunderSection
60(2)oftheTradePracticesAct
b)
Thecommonlawrulesrelatingtocontractlaw
alwaysoverruletheprovisionsoftheTrade
PracticesAct
c)
Limitationclausescanbeunfairandunreasonable
d)
AreturnofgoodsispermittedunderSection75A
oftheTradePracticesActwheretherehasbeena
breachofanimpliedcondition
Answer
Answer
?