FiT Scheme Representations
22 The Western Australian government operated a Residential Net Feed-in Tariff scheme (FiT Scheme) from 1 August 2010 to 1 August 2011. Under the FiT Scheme, owners of a renewable energy system, including Systems of the type supplied by Unleash Solar, could obtain payments in exchange for energy exported by the owner to the electricity grid.
23 In May 2011, the Western Australian government announced a reduction in the rate applicable for energy exported to the grid and that the FiT Scheme would close once the systems to which it applied reached a certain energy capacity. In August 2011, the Western Australian government announced the closure of the FiT Scheme.
24 In September 2011, the respondents sent to at least four customers a letter (FiT Letter) containing the following statements:
(1) 'As you are all aware, the Western Australian government has set a date for closure at the 30th of September 2011. However please be assured that you will not get $0 in return for your solar system even if we do not manage to have your system installed by the 30th of September 2011.'
(2) 'The FEED in is only for EXCESS power that you produce.'
(3) 'There is a huge misconception within the public with the belief that you will not receive. anything in return, however, you will still receive 1 to 1 payments for the electricity you produce. It is only excess power that you send back into the grid which you would be paid the higher feed in rate.'
(4) 'Many of our customers have only signed up for a 1.52kW or 2kW system, which will only produce a saving of between $175 and $250 every 2 months. If your electricity bill does not exceed this amount, you would not qualify for excess power, thus the feed in is not applicable to you. You will however, just get PAID BACK the price for what you pay for electricity and it will be deducted from your electricity bill.'
(5) 'For example, if you were to use 1000kW of power, and your system produces 900kW of power, you will only have to pay 100kW of power at the price you pay for electricity, plus the service fee your retailer charges you.'
(6) 'Therefore, as a customer installing before or after 30th September 2011, it is a WIN, WIN situation.'
25 The Commissioner alleges that these statements would have conveyed to the ordinary reader the following FiT Scheme Representations:
(1) a consumer who had a System installed after 30 September 2011 would receive 1 to 1 payments for electricity produced by the consumer's System (1 to 1 Payments Representation);
(2) under the FiT Scheme, a consumer who installed a System would only be eligible for payments at the FiT rate if that consumer's total system generation during a billing cycle exceeded their total household consumption during that billing cycle (Excess Generation Representation);
(3) if a consumer used 1000kW of power and the consumer's system produced 900kW of power, the consumer would only pay for 100kW of power plus the service fee (Example Representation); and
(4) the closure of the FiT scheme would not affect consumers whose electricity bills did not exceed $175 or $200 each two month billing cycle and who installed a 1.5kW or 2kW System, even if they installed that System after 30 September 2011 (No Excess Representation).
26 The Commissioner says that, contrary to each of these representations:
(1) a consumer who installed a system after 30 September 2011 would not receive 1 to 1 payment for electricity;
(2) a consumer who installed a System prior to 30 September 2011 would:
(a) purchase energy from the electricity grid at the applicable residential tariff (Residential Tariff) whenever the electricity generated by the System was less than the energy demand of the consumer's house at that particular time; and
(b) export energy to the electricity grid and be eligible for payments at the FiT rate (FiT Rate) whenever the electricity generated by the System exceeded the energy demand of the consumer's house at that particular time;
(3) the FiT Rate and the Residential Tariff were, at all material times, different;
(4) a consumer who installed a System after 30 September 2011 would not be eligible for payments at the FiT Rate for energy they exported to the electricity grid;
(5) if a consumer used 1000kW of power and the consumer's system produced 900kW of power, the consumer would not necessarily only pay for 100kW of power plus the service fee. The amount the consumer would pay would depend upon:
(a) the FiT Rate;
(b) the Residential Tariff;
(c) the amount of energy exported to the electricity grid; and
(d) the amount of energy purchased from the electricity grid; and
(6) the closure of the FiT Scheme would affect all consumers of Systems whose Systems were installed after 30 September 2011 because those consumers:
(a) would be likely to export energy to the electricity grid at some times of the day; and
(b) would no longer be eligible for the Fit Rate for those exports.
27 Section 18 of the ACL prohibits conduct, in trade or commerce, which is misleading or deceptive or likely to mislead or deceive.
28 Section 29(1)(g) ACL provides that a person must not, in trade or commerce, in connection with the supply or possible supply of goods or services make a false or misleading representation about benefits of goods or services.
29 Section 29(1)(m) ACL provides that a person must not, in trade or commerce, in connection with the supply or possible supply of goods or services make a false or misleading representation about the effect of a right.
30 Conduct will be in trade or commerce if it is an aspect or element of activities which of their nature, bear a trading or commercial character: Concrete Constructions (NSW) Pty Ltd v Nelson (1990) 169 CLR 594 (at 603).
31 In relation to representations with respect to any future matter, s 4 ACL provides:
(1) If:
(a) a person makes a representation with respect to any future matter (including the doing of, or the refusing to do, any act); and
(b) the person does not have reasonable grounds for making the representation;
the representation is taken, for the purposes of this Schedule, to be misleading.
(2) For the purposes of applying subsection (1) in relation to a proceeding concerning a representation made with respect to a future matter by:
(a) a party to the proceeding; or
(b) any other person;
the party or other person is taken not to have had reasonable grounds for making the representation, unless evidence is adduced to the contrary.
32 In summary, the following principles relevantly apply in relation to s 18 ACL:
Section 18(1) ACL applies to "conduct" which is misleading or deceptive or likely to mislead or deceive. "Conduct" is likely to mislead or deceive if there is a "real or not remote chance or possibility regardless of whether it is less or more than fifty per cent": Australian Competition and Consumer Commission v Dukemaster Pty Ltd [2009] FCA 682 (at [10]); Global Sportsman Pty Ltd v Mirror Newspapers Ltd (1984) 2 FCR 82 (at 87).
Whether conduct is misleading or deceptive must be considered by reference to a hypothetical individual who would have been a member of the class of consumer affected by the conduct. Where the representation is to the public at large the conduct must be assessed by reference to the ordinary or reasonable members of the class: Campomar Sociedad Limitada v Nike International Ltd (2000) 202 CLR 45 (at [102]-[106]).
The test is objective and the Court must determine the question for itself: Australian Competition and Consumer Commission v Dukemaster Pty Ltd [2009] FCA 682 (at [10]); Global Sportsman Pty Ltd v Mirror Newspapers Ltd (1984) 2 FCR 82 (at 87).
33 Each of the FiT Scheme Representations was a representation as to a future matter, namely, what benefits could be obtained under the FiT Scheme in the future. In the absence of evidence to the contrary, they are taken to be misleading.
34 In any event, it is apparent that the representations were actually misleading, deceptive and false. The representations conveyed to the ordinary, reasonable reader of the letter that a person who installed a System could, notwithstanding the FiT Scheme's closure, offset the cost of electricity consumption by the amount produced on a 1 to 1 basis. These representations were false and contrary to the actual position.
35 Whether consumers installed a System before or after 30 September 2011, they could not receive a 1 to 1 offset of electricity costs because patterns of consumption and production would differ such that they would not always equally offset one another. Further, those who installed it after 30 September 2011 would receive no offset at all under the FiT Scheme for extra energy produced by a System, meaning that excess production could have no effect on offsetting consumption costs at other times of the day.
36 Notably, each of these representations concerned both the benefits of a System and the rights of a System owner under the FiT Scheme, namely, the capacity to offset energy costs through excess generation.
37 These misleading and deceptive representations would have led consumers into error and were thus in contravention of s 18(1) ACL.