The expression 'trade or commerce' is a term of common usage and wide import. It encompasses conduct for the purposes of the sale and supply of goods, including the communications, the bargain, the transport and delivery of the goods and the payment for them: Re Ku-ring-gai Co-operative Building Society (No 12) Ltd (1978) 36 FLR 134 at 167 per Deane J; Concrete Constructions (NSW) Pty Ltd v Nelson (1990) 169 CLR 594 at 604. The goods which the respondent sought to sell, and agreed to sell, to the respondent's customers in the Northern Territory were consumer goods, not acquired for the purpose of resupply, but acquired for domestic use: see subs 51AB(5) and (6). The relevant conduct of the respondent was in connection with the supply or possible supply of consumer goods to the respondent's customers: see e.g. Our Town FM Pty Ltd v Australian Broadcasting Tribunal (1987) 16 FCR 465 per Wilcox J at 479; Drayton v Martin (1996) 67 FCR 1 per Sackville J at 32.
97 The term 'unconscionable' is not defined in the TP Act. Apart from the guidance given by s 51AB(2), its scope would appear to flow from its ordinary meaning of 'showing no regard for conscience, irreconcilable with what is right or reasonable': Samton at [44]. See also Hurley at 41-740 to 41-741, [19]-[22], and Simply No-Knead at 264-267, [30]-[37]. In Australian Competition & Consumer Commission v CG Berbatis Holdings Pty Ltd (No.2) (2000) 96 FCR 491, French J at first instance at 502-503 also said there was no reason to confine the meaning of unconscionable conduct in s 51AB(1) by reference to the qualifying or limiting additional words in s 51AA(1). I respectfully agree with Nicholson J in Lux at [98] where his Honour quoting Hurley said that what is required is serious misconduct or something clearly unfair or unreasonable. His Honour there added:
'It will be relevant whether advantage is taken of an innocent party who, though not deprived of an independent and voluntary will, is unable to make a worthwhile judgment as to what is in his or her best interests: Commercial Bank of Australia Ltd v Amadio (1983) 151 CLR 447 at 461.'
Nicholson J expressed similar views in Glenariff Holdings Pty Ltd v Tah Land Pty Ltd [2005] FCA 132 at [7]-[8] when addressing s 51AC of the TP Act.
98 In Lux, the Court was asked to make a finding of unconscionable conduct in contravention of s 51AB(1), in part based upon the alleged intellectual impairment of the relevant consumer. Evidence from an expert on the topic was not accepted. The Court was asked to make a finding of intellectual impairment on the part of the consumer based upon the Court's impression of her presentation in evidence. Nicholson J said at [75]:
'Although I approach that evidence with a mind open to be persuaded according to the balance of probabilities, a court would not usually expect to reach a finding of fact on a matter such as this state of mind without the assistance of expert diagnosis and description.'
Her Honour referred to the demeanour of the consumer in giving evidence, including that she was 'softly spoken and intimidated by the process', but was not prepared to infer from her demeanour that the asserted intellectual impairment existed. His observations did not support the inference that the consumer was 'patently a person of some vulnerability because she was substantially illiterate and unable to understand commercial matters in any depth': see at [76].
99 Section 52 of the TP Act is of course well known. It establishes a norm for conduct. Clearly the respondent engaged in conduct in trade or commerce. The issue is simply whether, having regard to the meaning of the words 'misleading or deceptive or is likely to mislead or deceive', the respondent's conduct had that character: see Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd (1982) 149 CLR 191. That is a question of fact in the circumstances of each case. Conduct is misleading or deceptive if it induces or is capable of inducing error.
100 There is nothing inherently unconscionable about procuring the sale of goods by unsolicited approaches to consumers. In this matter, however, the respondent's conduct had the features which satisfy me that it was unconscionable in the sense referred to in the authorities discussed above.
101 I have made findings as to the educational and commercial literacy of the complainants. Imbalance between a retailer and consumer in educational or commercial literacy generally will not of itself be enough to make a transaction unconscionable. In this matter, the respondent's dealings had additional features. He was a mature person clearly well able to understand the nature of the transactions into which he entered, and to appreciate those things which a consumer with normal commercial acumen might inquire about, or expect. Clearly, as I have found, none of the complainants made such inquiries or pursued such expectations. In particular, the respondent did not proffer, and none of the complainants sought, any written record of the contract into which they had entered. The respondent must have realized that. The respondent did not proffer, and none of the complainants sought, details of the number of modules of education materials of NMA which would be provided, nor when they would be provided, nor how much they would cost. The respondent did not provide, and none of the complainants sought, information as to when the anticipated purchase price for the goods to be supplied would have been paid for by the periodical payments authorised, nor what would happen when that purchase price was reached, nor how the periodical payments could then be terminated. The respondent could have, but did not make any such calculation himself. He could have specified, but did not, a termination date for the periodical payments in the periodical payment form to meet the anticipated selling price. The periodical payment forms used by the respondent imposed conditions upon the complainants, and the respondent's customers, which were not reasonably necessary for the protection of the legitimate interests of the respondent: see s 51AB(2)(b). In the case of the contracts with DCS not only was there no documentary record of the agreement provided to the complainant Ms White, but there was no evidence to indicate that the respondent had any educational materials to provide to her (beyond the NMA educational materials) at the time of the contract or, indeed, subsequently. He did not provide any DCS correspondence educational material. In the case of the transactions involving the sale of household goods by lay-by through EBS, the respondent did not provide, and the complainants Ms Williams, Ms Turner and Ms Palmer did not seek, details of the product or products to be acquired except in some instances by a generic description (e.g. DVD player). Nor did the respondent take any steps following the making of those contracts to acquire or allocate any particular goods for supply to that complainant or to any other of his customers who entered into arrangements involving payment to EBS. Those matters illustrate firstly that the respondent's customers, including the complainants, did not fully understand the nature of the transactions they entered into. The only document they signed in each instance was the periodical payment form. I have found the complainants did not have a full understanding of that document. I find the same is true of the respondent's customers in the Northern Territory generally. That is not to say that each of the complainants, or each of the respondent's customers, did not understand the effect of the periodical payment form or for cultural reasons did not have the capacity to decline his approach. I have found in the case of Ms Turner and Ms Doolan that they had that understanding. I am sure there are a number of the respondent's customers who did have a similar understanding, and to varying degrees the capacity in the light of their background and education, to decline to enter into a transaction with him. Overall, I am satisfied that all but those two complainants, and the majority of the respondent's customers, did not fully understand the periodical payments form. And I am satisfied that each of the respondent's customers including the complainants did not fully understand the nature of the transactions into which they entered.
102 The quality of the respondent's record keeping indicates that his commitment to supply goods agreed to be sold by him was, at best, half-hearted and somewhat random. The findings concerning the individual complainants indicate that clearly enough. Moreover, the respondent's conduct in being prepared to continue to receive periodical payments from certain of the complainants, and certain of his other customers, when the amount of those payments clearly very substantially exceeded the value of any goods which he had agreed to supply, indicates the inadequacy of his record keeping. More importantly, in my view, it illustrates that his purpose in entering into the agreements was not simply to secure the sale of particular goods of a particular value or at a particular price, and to provide those goods in a timely manner to the purchaser. His preparedness to take advantage of the complainants and of the respondent's customers by securing open-ended periodical payment forms in those circumstances, in my judgment, illustrates more than the relevant strengths of the bargaining positions of the respondent on the one hand and of the complainants and of the respondent's customers on the other. It also indicates the imposition of conditions by the respondent that were not reasonably required for the protection of the legitimate interests of the respondent.
103 I have found that the complainants (other than Ms Turner and Ms Doolan) did not understand the full implications of the periodical payment form which they executed. The transactions involving Ms White provide a good illustration of those matters. They lead me to the view that, even at the time of the transactions, the respondent in only the most general way may have had an intention to supply the goods which he had contracted to supply, but had in mind at the time the prospect of receiving considerably more than the value of the goods to be supplied from the complainants and from the respondent's customers. Were it otherwise, his record keeping would have been quite different, and he would have monitored on an individual account basis the payments made by each of the complainants and by each of the respondent's customers, to ensure that payments did not exceed the value of the goods which he had agreed to supply. He would also have maintained records as to what goods he had supplied from time to time, and what additional goods were required to be supplied, and at what times, to meet those contracts.
104 The particular considerations referred to in s 51AB(2)(a), (b) and (c) in particular, together with the more general considerations to which I have referred, all point very firmly to the conclusion of unconscionable conduct. There is insufficient evidence to determine whether the complainants or the respondent's customers could have acquired identical or equivalent goods or services from another person other than the respondent for a different amount than that which the respondent might have had in mind. Clearly, the amounts paid by way of periodical payments in a number of instances well exceeded the amount for which (for example) television or DVD sets could have been procured, and I also conclude that the proposed selling price (not expressed) for the NMA educational materials of $740, as the respondent acknowledged, was considerably in excess of their direct cost and included an allowance for his expertise in developing those materials so that, again, payments authorised beyond that amount which the transactions with the consumers at the time enabled (and which in many instances came to pass) are also an additional feature leading to the unconscionability of the respondent's conduct: see s 51AB(2)(e).
105 The respondent, in my view, was aware of the income level of each of the complainants in general terms, and of the significant proportion of their income which the periodical payment authorised would absorb. In the case of Ms White in particular, notwithstanding that knowledge he procured from her a further periodical payment form for an additional slightly increased amount some years later in circumstances where she had already massively overpaid him. That behaviour was clearly unconscionable.
106 Having regard to those findings, in my judgment, the respondent's conduct in entering into the transactions with the complainants was unconscionable. So too was his conduct in then receiving the periodical payments which he secured by lodging the periodical payment forms procured as part of each transaction with the complainants. Even though not all the factors to which s 51AB(2) directs attention operate to point to unconscionable conduct on the respondent's part in the case of each of the complainants, the overall picture which my findings represent is one of conduct on the respondent's part which showed no regard for conscience, and which was clearly unfair and unreasonable in respect of each of the complainants.
107 I have also reached that view with respect to each of the respondent's dealings with the respondent's customers in the Northern Territory. Obviously, those persons would have differing degrees of exposure to commercial and business transactions and differing facility in communicating in English; some would in general terms have understood the nature of the periodical payment forms, and many would not. Consequently, as with the transactions involving the complainants, not all the factors to which s 51AB(2) directs attention would operate to point to unconscionable conduct on the part of the respondent in his dealings with each of the respondent's customers. But my findings as to the respondent's way of operating, to which I have referred in detail above, also lead to the conclusion that his conduct in relation to each of the respondent's customers was unconscionable as that term is used in s 51AB(1) of the TP Act.
108 As I have said, I have not had regard to the evidence of Dr Martin in reaching those conclusions. However, his evidence if taken into account supports those conclusions and may provide a further reason for reaching them in the way explained above. His evidence explains why the complainants entered into such disadvantageous arrangements. They were each, to differing degrees, vulnerable by reason of their personal circumstances to succumb to the unsolicited proposal of someone such as the respondent to sign an open-ended periodical payment form. They were each indigenous female persons living in relatively poor circumstances, dependent primarily upon government welfare payments, and who had limited commercial experience. They had a natural reticence and diffidence in firmly refusing to accede to such a proposal as the respondent presented. As I have found, a number of those traits would have been apparent to the respondent at the time.
109 I therefore propose to make declarations in the following terms:
(2) The respondent, in trade or commerce within the Northern Territory, in connection with the supply or possible supply of children's learning materials and/or household goods to each of Ingrid White, Roseanne Dixon, Deanne Williams, Louanne Patterson, Marlene Doolan, Rosina Dickson, Fiona Turner and Muriel Palmer (collectively referred to as 'the complainants'), by entering:
1.1 agreements with each of Ingrid White, Roseanne Dixon, Deanne Williams, Louanne Patterson and Marlene Doolan in or about September 1998;
1.5 an agreement with Rosina Dickson in or about August 2000;
1.6 a second agreement with Ingrid White in or about September 2001; and
1.7 agreements with Fiona Turner, Muriel Palmer and a second agreement with Deanne Williams in or about May 2003;
engaged in conduct that was, in all the circumstances, unconscionable in contravention of s 51AB of the TP Act.
(2) The respondent, by receiving fortnightly payments from each of the complainants under the agreements in the following periods and in the following total amounts: