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Misleading and deceptive conduct

1. Between June 2014 and December 2018, the First Respondent engaged in conduct, in trade or commerce, in contravention of ss 18, 29(1)(h) and 29(1)(i) of the Australian Consumer Law applying as a law of the Commonwealth by s 131 of the Competition and Consumer Act 2010 (Cth) and as a law of the State of Victoria by s 8 of the Australian Consumer Law and Fair Trading Act 2012 (Vic) (referred to collectively herein as the Australian Consumer Law) by reason that its agents represented to consumers that: (a) Community Bulk Buy was an independent social enterprise for the purpose of reducing the price of residential solar photovoltaic (PV) systems (through bulk buying cost savings); (b) the more people who signed up to the Community Bulk Buy program, the greater the cost saving; and (c) the opportunity to acquire a solar PV system promoted as part of the Community Bulk Buy offer was only available for up to a few days, when those representations were false as the Community Bulk Buy program was a marketing fiction, there was no organisation (whether corporate or otherwise) which constituted Community Bulk Buy and consumers' purchases of solar PV systems were not aggregated in any way that generated cost savings for them.
2. Between June 2014 and December 2018, the First Respondent engaged in conduct, in trade or commerce, in contravention of ss 18 and 29(1)(e) of the Australian Consumer Law by reason that its agents distributed to consumers a Community Bulk Buy brochure that contained representations that purported to be testimonials in relation to the First Respondent's solar PV systems and no evidence was adduced to prove that the representations were not false or misleading.
3. Between June 2014 and December 2018, the First Respondent engaged in conduct, in trade or commerce, in contravention of ss 18 and 29(1)(k) of the Australian Consumer Law by reason that its agents distributed to consumers a brochure relating to the "One Solar" branded solar PV systems supplied by the First Respondent that contained a representation that One Solar International's solar panels utilised German and US engineering when that representation was false as the solar panels supplied by the First Respondent under the One Solar brand were manufactured in China.
4. Between June 2014 and December 2018, the First Respondent engaged in conduct, in trade or commerce, in contravention of ss 18 and 29(1)(a) of the Australian Consumer Law by reason that its agents distributed to consumers a brochure relating to the "One Solar" branded solar PV systems supplied by the First Respondent that contained a representation that One Solar International is a leading global manufacturer of Solar PV system solutions for the residential and commercial market and that One Solar International is the world's first fully integrated "one-stop-shop" solar company that controls the whole process of manufacturing, installation and servicing of entire solar PV system applications, which representations were false as One Solar International did not manufacture solar panels but merely owned the brand name "One Solar".
5. On an indeterminate number of occasions between September 2016 and May 2017, the First Respondent engaged in conduct, in trade or commerce, in contravention of s 18 of the Australian Consumer Law by reason that its agents distributed to consumers a brochure relating to the "One Solar" branded solar PV systems supplied by the First Respondent that contained the Clean Energy Council logo and thereby represented that One Solar International was affiliated with, or approved by, the Clean Energy Council when that was false.
6. On 23 September 2015, the First Respondent engaged in conduct, in trade or commerce, in contravention of ss 18 and 29(1)(g) of the Australian Consumer Law by reason that its agent represented to Ms Maria Capodicasa that after installing the solar PV system she would not receive another energy bill, which was misleading because there was not a reasonable basis for making the representation and she continued to receive electricity bills after the solar panels were installed.
7. On 30 September 2015, the First Respondent engaged in conduct, in trade or commerce, in contravention of ss 18, 29(1)(g) and 29(1)(k) of the Australian Consumer Law by reason that its agent represented to Mr Davide Altobelli: (a) that after installing the solar PV system he would not receive another energy bill, which was misleading because there was not a reasonable basis for making the representation and he continued to receive electricity bills after the solar panels were installed; and (b) that the solar panels supplied by the First Respondent were German made, when that was false as the panels were made in China.
8. On 24 April 2017, the First Respondent engaged in conduct, in trade or commerce, in contravention of ss 18 and 29(1)(g) of the Australian Consumer Law by reason that its agent represented to Mr Rodney Davis that the payments to First Respondent for the solar panels would take the place of his power bills, which was misleading because there was not a reasonable basis for making the representation and the solar power credits received by Mr Davis did not cover even half of his power bill.
9. On 23 May 2017, the First Respondent engaged in conduct, in trade or commerce, in contravention of ss 18, 29(1)(g) and 29(1)(k) of the Australian Consumer Law by reason that its agent represented to Mr Mark Boast: (a) that once the solar PV system was installed, it would heavily reduce his electricity bill, which was misleading because there was not a reasonable basis for making the representation and his power bills were only reduced slightly; and (b) by giving him a One Solar brochure indicating that the inverters were manufactured in Germany or the USA, that the "One Solar" branded inverters supplied by Vic Solar were manufactured in Germany or the USA when that was false as the inverters were made in China.
10. On 5 December 2018, the First Respondent engaged in conduct, in trade or commerce, in contravention of ss 18 and 29(1)(g) of the Australian Consumer Law by reason that its agent represented to Mr Maxwell Johansen that the cost for the solar panels would only be $14 more than his then current power bill, so that he would only be paying $78 a fortnight, and that he might receive a small electricity bill of about $10, which was misleading because there was not a reasonable basis for making the representation and Mr Johansen did not receive any material (cost saving) benefit from the solar panels. Unsolicited consumer agreements
11. The First Respondent contravened s 74(a) of the Australian Consumer Law on each occasion between June 2014 and December 2018 that its dealers called on home-owners to solicit "leads" for the sale of solar PV systems by reason that the dealers failed to clearly advise the home-owners, before beginning to negotiate, that the dealer's purpose was to seek agreement to the supply of a solar PV system by the First Respondent.
12. The First Respondent contravened ss 76 and 79 of the Australian Consumer Law on each occasion between June 2014 and December 2018 that Vic Solar entered into agreements for the sale of its solar PV systems to consumers, including when entering into agreements with Ms Capodicasa on 23 September 2015, Mr Altobelli on 30 September 2015, Ms Wright on 18 November 2016, Mr Davis on 24 April 2017, Mr Boast on 23 May 2017 and Mr Johansen on 5 December 2018, by reason that: (a) before the agreements were made, the consumer was not given information in writing as to the consumer's right to terminate the agreement during the termination period or the way in which the consumer may exercise that right; and (b) the agreements did not contain on the front page a notice that conspicuously and prominently informed the consumer of the consumer's right to terminate the agreement in accordance with s 79(a)(b)(i) and were not accompanied by a notice that could be used by the consumer to terminate the agreement in accordance with s 79(c)(i).
13. On or about 22 April 2015, the First Respondent contravened s 86 of the Australian Consumer Law by its sales representative accepting a deposit of $400 from Ms Hizon at the time of signing an unsolicited consumer agreement.
14. On or about 27 April 2015, the First Respondent contravened s 84 of the Australian Consumer Law by not returning or refunding to Ms Hizon the deposit paid by her after Ms Hizon terminated the unsolicited consumer agreement entered into by her in accordance with s 82 of the Australian Consumer Law.
15. On 23 September 2015, the First Respondent contravened s 86 of the Australian Consumer Law by its sales representative accepting a deposit of $1,000 from Ms Capodicasa at the time of signing an unsolicited consumer agreement.
16. The First Respondent contravened s 86 of the Australian Consumer Law by commencing the installation of a solar PV system at Ms Capodicasa's premises within 10 days of her signing the unsolicited consumer agreement on 23 September 2015.
17. On 30 September 2015, the First Respondent contravened s 78 of the Australian Consumer Law by reason that its agent made an unsolicited consumer agreement with Mr Altobelli in his home and did not provide a copy of the agreement to Mr Altobelli after it was signed.
18. On 24 April 2017, the First Respondent contravened s 73 of the Australian Consumer Law by reason that its dealer called on Mr Rodney Davis after 6pm for the purpose of negotiating an unsolicited consumer agreement.
19. On 23 May 2017, the First Respondent contravened s 73 of the Australian Consumer Law by reason that its dealer called on Mr Boast at about 6pm for the purpose of negotiating an unsolicited consumer agreement. Unconscionable conduct
20. The First Respondent, in trade or commerce in connection with the supply of solar PV systems, engaged in unconscionable conduct in contravention of s 21 of the Australian Consumer Law in the course of each of its sales of solar PV systems between June 2014 and December 2018, including in the course of its sales to Ms Capodicasa on 23 September 2015, Mr Altobelli on 30 September 2015, Ms Wright on 18 November 2016, Mr Davis on 24 April 2017, Mr Boast on 23 May 2017 and Mr Johansen on 5 December 2018, by reason that: (a) its business model was an intentional system of trading to call on consumers at their homes using "lead generators", an environment in which consumers are more vulnerable to predatory and unfair sales tactics; (b) an important element of its business model was the "Community Bulk Buy" marketing concept which was false and misleading; (c) many other aspects of its marketing were false or misleading, including particularly that the First Respondent was offering a "leading brand" of solar PV systems manufactured in Germany and the US; (d) it failed to comply with many of the requirements of Division 2 of Part 3-2 of the Australian Consumer Law; and (e) the prices charged for its solar PV systems were above average market prices for systems of similar quality. Accessorial liability
21. The Second Respondent was knowingly concerned in the First Respondent's contraventions of the Australian Consumer Law which are the subject of the declarations in paragraphs 1, 2, 3, 4, 7(b), 9(b) and 12 by reason that: (a) the Second Respondent was the director of, and a shareholder in, the First Respondent from October 2012 until it went into administration in November 2019, oversaw the direction of the First Respondent's business and worked within the business on a day-to-day basis; (b) the Second Respondent was responsible for the First Respondent's marketing and sales system involving the lead generators knocking on household doors to seek an invitation for a sales representative to visit to discuss the sale of a solar PV system; (c) the Second Respondent reviewed and approved the marketing scripts used by the First Respondent's lead generators in the course of their marketing activities; (d) the Second Respondent knew that the representations made by the First Respondent which are the subject of the declarations in paragraphs 1, 2, 3, 4, 7(b) and 9(b) were false; and (e) the Second Respondent knew that the agreements used by the First Respondent did not contain notifications required by ss 76 and 79 of the Australian Consumer Law. AND THE COURT ORDERS THAT:
22. The Respondents pay the Applicant's costs of the proceeding to date.
23. The matter be listed for a hearing regarding penalties and other relief at 10.15am on 23 April 2021.
24. The Applicant file and serve any submissions or evidence in support of the application for penalties and other relief by 19 March 2021.
25. The Respondents file and serve any submissions or evidence in response by 9 April 2021.
26. The Applicant file any material in reply by 16 April 2021. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.