What happened

The Director of Consumer Affairs Victoria brought a public-interest application under Part 2B of the Fair Trading Act 1999 (Vic) seeking declarations that a series of standard-form terms used by Backloads.com Pty Ltd in its removalist-service contracts were unfair, and seeking injunctive relief and consequential declarations under s 163 (consumer documents must be in at least 10-point font and be clearly expressed). Backloads (sole director Mr Matysik) ran an internet-based business arranging transport of household goods and either supplied services itself or, according to its pleaded position, acted in part as an agent or intermediary for owner-drivers.

VCAT (Judge Harbison) heard evidence from consumers who alleged late collection, delayed deliveries, missing and damaged goods, and from an inspector for the Director who described repeated requests to the respondent to redraft terms and use 10-point font. Backloads defended the application with a mixture of written material, assertion of industry practice and business necessity, and argued many terms were common in the industry or necessary for the low-price business model. The respondent also attempted to join industry bodies late in the hearing; that application was refused.

The Tribunal characterised the arrangement as a consumer contract and examined each impugned clause against s 32W and indicia in s 32X. It declared several clauses unfair (choice-of-law clause 2(e); clause 8(b) on changes to quoted information; clause 9(b) assignment to an unidentified contractor; clauses 10(a)–(c) concerning a general lien; clauses 11(a)–(c) re movement and delivery; clauses 14(b), 14(c) limitation of liability; and clause 14(f) indemnity and solicitor-client costs). Clause 8(c) (some cancellation and delay charges) was not declared unfair. The Tribunal also declared the document non-compliant with s 163 (font and clarity). Injunctive relief restraining use of the unfair terms (or similar terms) was granted; certain relief sought by the Director (individual notices to customers and publication orders) was refused.

Why the court decided this way

Three core legal steps underlay the decision.

Establish jurisdiction: The Tribunal first determined the contract type. Applying the statutory definition in s 3 Fair Trading Act, it concluded the contracts were consumer contracts because they concerned removal of ordinary household items and the services were of a kind ordinarily acquired for personal, domestic or household use. This gave Part 2B scope.
Apply s 32W/32X analysis to each clause: The statutory test requires a term to be unfair if, contrary to the requirements of good faith and in all the circumstances, it causes a significant imbalance to the consumer. Section 32X gives relevant indicia (for example, where a term permits the supplier but not the consumer to vary the contract, to limit performance, to penalise the consumer or to assign benefits to the detriment of the consumer). Judge Harbison considered two competing authorities about the role of 'good faith' (AAPT and Jetstar). Although acknowledging both, she chose to give the respondent the benefit of the more liberal approach in Jetstar for assessing good faith, yet still held that in context evidence of industry practice or cheap pricing could not justify clauses that conferred unfettered discretion or that sought to deprive consumers of statutory protections.
Remedy and proportionality: On remedies, because Part 2B is public-interest protection, declarations and injunctions serve educative and deterrent functions. The Tribunal assessed utility, risk of non-compliance, and the respondent's conduct (including statements that some terms were a 'bluff' and publication of allegations about a complainant on the website). Those factors supported injunctive relief framed to include 'terms of similar effect' to prevent superficial cosmetic amendments designed to evade the ruling.

Concrete applications of these steps produced the findings:

Clause 2(e) (choice of ACT law and deeming entry in ACT) was unfair because it tried to artificially displace the proper law and to avoid Victorian statutory protections, a discrete, unusual and one-sided burden and potential 'unfair surprise'.
Clause 8(b) gave absolute unfettered discretion to the trader to either perform strictly or vary charges when consumer information was inaccurate, unfair because there was no limitation, objective standard or notice to consumers.
Clause 9(b) assigned rights to an unidentified non-party, creating uncertainty as to who could enforce or collect, unfair.
Clauses 10(a)–(c) deployed the language of liens but extended them beyond common-law limits (including permitting retention for third-party debts and sale without proper constraints), unfair.
Clauses 11(a)–(c) permitted penalties for movement of incorrect goods even where supplier fault existed, abandonment of goods if no-one present and absolute discretion on route/time, unfair where the discretion removed bargaining certainty and created potential for abandonment.
Clauses 14(b)/14(c)/14(f) attempted to exclude liability for acts within supplier control (including negligence) and impose wide indemnities and solicitor-client costs, unfair.
Clause 8(c), dealing with delays/cancellations, was not unfair because its charges were not shown to be disproportionate or to confer an absolute and unreviewable discretion: the Tribunal accepted cancellation charges were a legitimate business response where space is booked and last-minute cancellations have knock-on effects.

On s 163, the Tribunal accepted evidence showing the terms as provided (printed copies given to consumers and the website copy) used font below 10-point and contained inconsistent, unclear, and misleading references, contrary to s 163(3)(b)-(c).

Before and after state of the law

Before:

Part 2B was relatively new and jurisprudence under s 32W was developing. Two conflicting approaches had emerged: AAPT (the Tribunal President) treated the 'good faith' phrase mostly as adjectival to describe significant imbalance, and Jetstar (VSC) treated 'good faith' as a separable element requiring attention to commercial morality, industry practice and 'unfair surprise'.

This judgment:

Applies and synthesises both lines but explicitly follows the Jetstar approach for the purposes of argument in favour of the respondent (giving the most liberal construction) while still emphasising that industry practice or cheap pricing will not, without more, justify clauses that deprive consumers of statutory protections or create unfettered unilateral powers. The Tribunal expressly applied s 32X indicia clause-by-clause and used Part 2B's public-interest remedial character to justify declarations and injunctions.

After:

The decision reinforces that standard-form contract clauses that create unfettered supplier discretion, assign rights to unnamed third parties, extend liens beyond lawful bounds, exclude liability for supplier fault, or are not plainly expressed/legible will be scrutinised and likely struck down under Part 2B. It emphasises that the Tribunal will look at the clause in context and will not accept 'market practice' as a blanket justification unless the precise conduct authorised by the clause is replicated in an acceptable industry practice.

Key passages with plain-English translation

"This agreement shall be deemed to have been entered into in the Australian Capital Territory.", Tribunal: unfair because it's an artificial choice of law that may deprive Victorian consumers of statutory protections.

Plain English: A clause that simply says 'we'll pretend the contract was made in another state' cannot be used to strip you of local consumer rights when the reality of where and how the deal was struck points to your local law.
Clause 8(b) giving discretion to perform as quoted or vary charges:

Tribunal: unfair because it gives the trader a blank cheque to choose how to treat changes and penalise the consumer without objective standards or prior warning.

Plain English: If you add an extra sofa to the move, the company cannot be allowed to decide on the spot to charge whatever it wants or refuse to adjust the booking fairly.
Assignment to unnamed contractor (clause 9(b)) and lien clauses:

Tribunal: these create confusion and permit the company to keep rights ambiguous while purporting to enforce liens inconsistent with assignment.

Plain English: You cannot have a contract that says 'we'll pass your money rights to someone we do not name' and at the same time reserve the right to hold or sell your goods.
Clause 14(c) excluding liability even for negligence:

Tribunal: unfair to exclude liability for losses in the company's control.

Plain English: A company cannot write a clause that says 'we are never responsible, even if we lose or break your stuff through our negligence' and expect that to be fair.

What fact patterns trigger this precedent

Standard-form consumer contracts where the supplier seeks to:
- Nominate a neutral or other-state law jurisdiction in a way that has no real connection to the transaction and tends to exclude local consumer protections.
- Give itself absolute, unreviewable discretion to vary charges, performance times, routes or to determine breach without objective standards or prior notice.
- Assign rights to unidentified third parties (collectors/contractors) without naming them or clarifying consumer remedies.
- Purport to create liens that extend to debts of third parties, prior agreements, or permit seizure/sale without proper safeguards.
- Include broad exclusions of liability that encompass supplier negligence or wilful misconduct.
- Draft consumer documents in fonts smaller than statutory minimums or with internal inconsistencies, references to unidentified parties, or contradictory clauses likely to mislead consumers.

If a trader's contract contains any of these features in a consumer setting (especially where the trader advertises online and uses 'take it or leave it' standard terms for household moves), the Backloads decision is directly instructive.

How later courts have treated it

This decision is part of a body of VCAT decisions applying Part 2B and interacts with AAPT (Tribunal) and Jetstar (VSC). The judge expressly engaged with both lines and adopted the interpretive approach that treats 'good faith' as a meaningful consideration (per Jetstar) while remaining faithful to Part 2B's public-interest remedial purpose (as emphasised in AAPT). The judgment anticipates legislative refinement (removal of 'good faith' from s 32W was already proposed at the time).

Practitioners should treat Backloads as authoritative at VCAT level for the following: careful clause drafting is required; industry practice is not a blanket defence; and regulators can obtain declarations and broad injunctions where there is a prospect of evasion through cosmetic amendments. Subsequent courts have continued to examine these tensions between marketplace practices, the role of good faith, public-interest remedies and the precise statutory indicia in s 32X.

Still-open questions

The role of 'good faith' in s 32W: At the time the judgment was delivered, the legislative landscape was in flux and authorities diverged (AAPT versus Jetstar). Pending legislative amendment, the precise doctrinal role of 'good faith' and the weight to be accorded industry practice remain points for contest in future appellate rulings.
Extraterritorial operation: While Judge Harbison applied Union Steamship principles to confirm Part 2B can reach Victorian-registered companies dealing interstate, the limits of state extraterritorial regulation in complex cross-jurisdictional carriage arrangements may continue to attract argument.
Margin of reasonable commercial necessity: The decision recognises that certain clauses may be justifiable by particular commercial models (e.g. consolidation/back-loading). However, how narrowly must such clauses be tailored and what objective standards will satisfy the Tribunal remains a question for future litigants and drafters: the safe drafting route is specific, constrained, and transparent clauses rather than broad discretions.
Remedies design: The decision expanded injunctive relief to cover 'terms to similar effect' to prevent cosmetic evasion. How far future tribunals can and should frame broadly-worded injunctions before they become uncertain to enforce is a live drafting and appellate issue.
Online presentation and s 163: The Tribunal read 'printed or typed' to include keyboarded website text for the 10-point rule. As online contracting grows more complex, precise standards for web presentation (what counts as 'printed' and how to measure font size across devices/browsers) will need greater doctrinal clarity or legislative guidance.

Practical takeaways for lawyers and compliance professionals: review standard consumer-form contracts in the removal/transport sector and analogous industries; eliminate absolute discretions, name assignees or limit assignments, craft lien clauses aligned with common-law limits, do not exclude liability for supplier negligence, and ensure consumer documents meet statutory legibility and clarity requirements.

Judgment (166 paragraphs)

[1]

Director of Consumer Affairs Victoria v Backloads.com Pty Ltd (Civil Claims) [2009] VCAT 754 (11 May 2009)

[2]

Part 2B Fair Trading Act 1999- characterisation of unfair terms in consumer contracts-meaning of contrary to the requirements of good faith and in all the circumstances-removalist industry contract- circumstances in which declaration and injunction appropriate-Director of Consumer Affairs v AAPT and Jetstar v Free considered.

[3]

Director of Consumer Affairs Victoria v Backloads.com Pty Ltd (Civil Claims) [2009] VCAT 754

[4]

(a) An offer comprising a quotation either in writing or oral or partly in writing and partly oral prepared by the respondent identifying:
- (i) the location of the consumer's goods and the destination to which they are to be carried, including any special pickup or delivery instructions;
- (ii) an inventory of the consumer's goods to be carried;
- (iii) the price at which the consumer's goods will be carried;
- (iv) an estimate of the approximate transit time required for the carriage or delivery of the consumer's goods; and
- (v) incorporating by reference the respondent's "conditions of contract" published on the respondent's internet website at www.backloads.com.au; and

[5]

(b) An acceptance of the offer, either in writing or oral or partly in writing and partly oral, by the consumer and communicated to the respondent,

[6]

("the Backloads removalist services contract" or "the contract") -

[7]

together constitute a consumer contract for the purposes of the Fair Trading Act 1999 (Vic) ("the Act") because they represent an agreement, for the supply by the respondent of local, intrastate, and interstate removalist services for personal property including furniture, household goods, baggage, and personal effects, being services of a kind ordinarily acquired for personal, domestic or household use or consumption for the purposes of their ordinary personal, domestic or household use or consumption.

[8]

Artificially excluding consumer's rights under the Act

[9]

"2(e) This agreement shall be governed by and interpreted and enforced in accordance with the laws applicable in the Australian Capital Territory. This agreement shall be deemed to have been entered into in the Australian Capital Territory."

[10]

in the Backloads removalist services contract is an unfair term, for the purposes of section 32W of the Act, because:

[11]

(a) the object or effect of the term is, among other things, to artificially require all contracts to have been made with the respondent in the Australian Capital Territory. This is contrary to fact and reality. In so far as the respondent enters into contracts with consumers in Victoria, or otherwise enters into contracts which would be governed by the laws of Victoria, the term has the object or effect of depriving the relevant consumer of the protections afforded by the Act, particularly, Part 2A, Part 2B and section 163; and

(b) the term has the object or effect of limiting the relevant consumer's right to sue the respondent or, alternatively, deterring the non-Australian Capital Territory consumers from enforcing the contract -

[12]

thereby creating a significant imbalance in the parties' rights and obligations arising under the Backloads removalist services contract to the detriment of the consumer.

[13]

Penalising the consumer for varying, postponing, or cancelling the contract

[14]

"8(b) If the information supplied is incorrect, inadequate, inaccurate or varied after a quotation has been given, the Company may at its discretion perform the work strictly as per its quotation or vary its charges in accordance with a pro-rata adjustment based on the variation in the specified quantity, volume or weight of the goods plus any variation of estimated loading and unloading times charged at the time rate." (Emphasis in original)

[15]

in the Backloads removalist services contract is an unfair term, for the purposes of section 32W of the Act, because:

[16]

(a) Term 8(b) has the object or effect of penalising the consumer by permitting the respondent in its discretion to perform the contract as originally agreed without regard to the consumer's desire or need to vary the contract;

(b) Term 8(b) has the object or effect of:

(i) permitting the respondent to determine, or vary, or determine and vary the price, without the right of the consumer to terminate the contract (section 32X(f) of the Act);

(ii) permitting the respondent unilaterally to vary the characteristics of the services to be supplied under the contract (section 32X(g) of the Act); and

(iii) permitting the respondent unilaterally to determine whether the contract has been breached or to interpret its meaning (section 32X(h) of the Act);

(c) Term 8(b) creates uncertainty for the consumer. The certainty of the contract is removed only for the consumer. There is no mutuality;

[17]

thereby creating a significant imbalance in the parties' rights and obligations arising under the Backloads removalist services contract to the detriment of the consumer.

[18]

Assignment of rights to collect charges and payments to an unidentified non-party

[19]

"9(b) The Company hereby assigns its rights and the rights of any persons on behalf of whom it is acting, to collect all charges and payments from Clients to the Contractor. The Contractor agrees to issue invoices and to collect all such charges and payments directly from Clients."

[20]

in the Backloads removalist services contract is an unfair term, for the purposes of section 32W of the Act, because:

[21]

(a) the term has the object or effect of assigning rights in respect of the contract to an unidentified non-party. In addition, the term purports to permit the unidentified non-party to issue invoices and collect all charges and payments payable by the consumer under the Backloads removalist services contract;

(b) it creates uncertainty for the consumer because the "Contractor" is not a party to the removalist services contract; and

(c) accordingly, it has the object or effect of permitting the supplier to assign the contract to the consumer's detriment without the consumer's consent (section 32X(j) of the Act) -

[22]

thereby creating a significant imbalance in the parties' rights and obligations arising under the Backloads removalist services contract to the detriment of the consumer.

[23]

Imposing a lien on goods (including goods owned by a non-party) even though right to collect payment has been assigned

[24]

"10(a) All goods of the Client, or carried on behalf of the Client, that are received by the Company shall be subject to a general lien for any monies owed by the Client or the owner of the goods to the Company or the Contractor as a result of this agreement or any previous agreement between the Company and the Client or the owner of the Goods." (Emphasis in original)

[25]

"10(b) In order to exercise its rights under the aforementioned lien, the Company shall have the right to seize or retain or to defer or refuse delivery of any goods that are the subject of this lien should circumstances arise that make it reasonable to conclude that the Client is unwilling or unable to pay any due charges in the required form or at the required place or time."

[26]

"10(c) Where the charges of the Company remain unpaid for a minimum period of 28 days, the Company may give 28 days written notice by certified or registered mail to the last known address of the Client of intention to sell. If the amount owing is not paid within that further period the Company may open any packages, DISPOSE OF THE GOODS or SELL ALL OR ANY OF THE GOODS by auction or by private treaty at its absolute discretion. Out of any monies arising the Company may retain its charges and all charges and expenses of the detention and sale. It shall credit the surplus, if any, to the person entitled to it. Any such sale shall not prejudice or affect any other rights that the Company may have to recover any outstanding charges due or payable in respect of such service or the said detention or sale."

[27]

in the Backloads removalist services contract are unfair terms, for the purposes of section 32W of the Act, because:

[28]

(a) Term 10(a) imposes a general lien on a consumer's goods for monies owed by a non-party to the contract and in respect of other contracts. This is unreasonable;

(b) Term 10(a) imposes a broad general lien by the respondent, as a private carrier, in circumstances where the contract requires payment on or before pick up for the job and in a manner seeking to overcome the common law limitations on the imposition of a lien. This is unreasonably excessive to protect the legitimate interests of the respondent;

(c) Term 10(a) is inconsistent with Term 9(b) of the contract;

(d) Term 10(a) purports to extend the operation of the "general lien" to the benefit of the "Contractor" an unidentified non-party to the removalist services contract;

(e) Term 10(a) imposes an unreasonable burden on consumers, given the effect of Terms 8(b), 8(c), and 11(c) of the contract, which create uncertainty for the consumer;

(f) Term 10(b) is inconsistent with Term 9(b);

(g) having assigned the respondent's rights to collect charges and payments under the contract, Terms 10(b) and 10(c) inconsistently purport to permit the respondent to enforce the lien against the consumer;

(h) Terms 10(b) and 10(c) each impose an unreasonable burden on consumers, given the effect of Terms 8(b), 8(c) 9(b) and 11(c) of the contract, which create uncertainty for the consumer. The certainty of the contract is removed only for the consumer. There is no mutuality; and

(i) Terms 10(a), 10(b), and 10(c) each have the object or effect of:

[29]

(i) penalising the consumer but not the respondent for a breach of the contract (section 32X(c) of the Act); and

[30]

(ii) permitting the respondent unilaterally to determine whether the contract has been breached or to interpret its meaning (section 32X(h) of the Act) -

[31]

thereby creating a significant imbalance in the parties' rights and obligations arising under the Backloads removalist services contract to the detriment of the consumer.

[32]

Reserving an absolute discretion regarding the performance of the respondent's obligations under the contract

[33]

"11(a) Movement of incorrect goods. The Client shall provide an authorised representative who will be responsible for ensuring that the correct goods are loaded. Whether or not such a representative is provided, and WHETHER OR NOT the Client provided the Company with a LIST of ITEMS to be moved, the Client shall pay all reasonable additional charges whatsoever resulting from the movement of incorrect goods or non-movement of goods that the Client intended to have moved." (Emphasis in original)

[34]

"11(b) If there is no-one in attendance at the place for delivery of the Goods the Company shall be entitled at its discretion to leave the Goods at that place or to return at a later time until delivery is completed, storing the Goods at any convenient place in the meantime, and the Client agrees to pay any reasonable additional charges incurred thereby to the Company." (Emphasis in original)

[35]

"11(c) The method, route and time by which the carriage of Goods or provision of services under this contract are performed shall be at the absolute discretion of the Company."

[36]

in the Backloads removalist services contract are unfair terms, for the purposes of section 32W of the Act, because:

[37]

(a) Term 11(a) has the object or effect of penalising the consumer for:

[38]

(i) the movement of "incorrect goods" or the non-movement of goods even if the consumer provides the respondent with a correct list of goods to be moved; and

[39]

(ii) even if the movement of the "incorrect goods" or the non-movement of goods is due to the fault or negligence of the respondent;

[40]

(b) Terms 11(a) and 11(b) each impose an unreasonable burden on consumers, given the effect of Terms 8(b), 8(c), and 11(c) of the removalist services contract, which create uncertainty for the consumer;

(c) Term 11(b) has the object or effect of permitting the respondent to leave the goods at the place for delivery even if there is no one in attendance. That is, effectively abandoning the goods. This is unreasonable;

(d) Term 11(c) has the object or effect of permitting the respondent in its absolute discretion to determine the time by which the carriage of goods or provision of services under the contract are performed. This is inconsistent with conditions implied into the contract by law. It is an unreasonably excessive, broad, unqualified discretion going to issues at the heart of the contract between the respondent and a consumer;

(e) Term 11(c) creates uncertainty for the consumer. By giving the respondent the right to unilaterally vary the time at which the goods are to be delivered pursuant to the removalist services contract, and by giving the respondent to deliver the goods at any time and without notice to the consumer; there is no certainty to the bargain the parties have struck. The certainty however, is removed only for the consumer. There is no mutuality; and

(f) Terms 11(a), 11(b), and 11(c) each have the object or effect of:

(i) permitting the respondent, but not the consumer, to limit performance of the contract (section 32X(a) of the Act);

(ii) permitting the respondent, but not the consumer, to vary the terms of the contract (section 32X(d) of the Act); and

(iii) permitting the respondent to unilaterally vary the characteristics of the services to be supplied under the contract (section 32X(g) of the Act) -

[41]

thereby creating a significant imbalance in the parties' rights and obligations arising under the Backloads removalist services contract to the detriment of the consumer.

[42]

"14(b) The Client recognises that there are always risks involved in the movement of any Goods or the provision of services under this contract, many of which are outside the Company's or the Client's control. All basic quoted prices are for the provision of carriage and other services whereby the Client understands and accepts that there are such risks, accepts any financial detriment or other losses that may result from the performance or non-performance of such work and agrees that the Company shall NOT be responsible or liable for such losses. The effect of this sub-clause may be varied where the Client chooses a Transit Protection option. (See Clause 15) or where it is otherwise agreed in writing."

[43]

"14(c) Save as expressly provided in these conditions the Company shall not be liable to the Client for any loss or damage suffered by the Client directly or indirectly caused by:

[44]

(i) any damage loss or destruction to Goods whilst in the possession of the Company whether in transit (which includes, amongst other things, any packing, handling, installation, removal, assembly or erection), or in storage, or after they have been delivered or mis-delivered;

[45]

(ii) a mis-delivery, delay in pickup or delivery, or non-delivery of Goods;

[46]

(iii) the carriage of Goods by a route other than the shortest or usual route;

[47]

(iv) any failure to collect Cash on Delivery (COD) on behalf of the Client; and this clause shall apply whether or not any such occurrence was due to any wilful, fraudulent negligent or other act or omission of the Company." (Emphasis in original)

[48]

in the Backloads removalist services contract are unfair terms, for the purposes of section 32W of the Act, because:

[49]

(a) Term 14(b) has the object or effect of unreasonably limiting liability for the respondent for matters which are or were under the respondent's control;

(b) Term 14(b) confers an unreasonable benefit upon the respondent by purporting to exempt the respondent for its failure to provide the services contracted for and/or failing to provide those services at an appropriate standard, where such failure is attributable to routine and foreseeable factors such as its delay and other factors within its control;

(c) Term 14(c) has the object or effect of limiting the respondent's liability for any loss or damage suffered by the consumer whilst the goods are in the possession of the respondent, whether in transit or in storage, or suffered by the consumer as a result of mis-delivery, delay, or non-delivery of the consumer's goods, even if such destruction, mis-delivery, delay, or non-delivery is due to a wilful, fraudulent, or negligent act or omission of the respondent; and

(d) Terms 14(b) and 14(c) each have the object or effect of limiting the consumers right to sue the respondent (section 32X(k) of the Act) -

[50]

thereby creating a significant imbalance in the parties' rights and obligations arising under the Backloads removalist services contract to the detriment of the consumer.

[51]

Imposing an unreasonable indemnity burden on the consumer

[52]

"14(f) The Client shall INDEMNIFY the Company against any action, claim, suit, fine or demand brought by any third party, the Client or the Contractor against the Company as a result of or in connection with any breach by the Client of any term of this contract or the occurrence of any of the events listed in this clause or clauses 10, 12 or 14 and this indemnity shall extend to the reasonable solicitor client costs of the Company in defending any action and in enforcing this indemnity."

[53]

in the Backloads removalist services contract is an unfair term, for the purposes of section 32W of the Act, because:

[54]

(a) Term 14(f) has the object or effect of requiring the consumer to indemnify the respondent for:

(i) loss or damage arising from the exercise of a lien in relation to goods not owned by the consumer and charges or payments arising other than from the Backloads removalist services contract; or

(ii) loss or damage occasioned by the wilful, fraudulent, negligent, or other act or omission of the respondent;

(b) Term 14(f) confers an unreasonable benefit upon the respondent by purporting to make the consumer liable for the consequences of any proceedings against the respondent by:

(i) the consumer;

(ii) The respondent's contractors; and

(iii) any third party -

[55]

arising out of or as a consequence of any breach of the contract by the respondent, even those involving negligence or fraud;

[56]

(c) Term 14(f) imposes an unreasonably excessive requirement to pay legal costs on a solicitor client basis; and

(d) Term 14(f) has the object or effect of limiting the consumer's right to sue the respondent (section 32X(k) of the Act) -

[57]

thereby creating a significant imbalance in the parties' rights and obligations arising under the Backloads removalist services contract to the detriment of the consumer.

[58]

The Backloads removalist services contract is a consumer document which, to the extent it is printed on paper, typed onto paper or typed by keyboard strokes onto an internet webpage, is not in a minimum 10 point font, contrary to section 163(3)(b) of the Act.
The Backloads removalist services contract is a consumer document that creates confusion, uncertainty, or doubt and is, therefore, not clearly expressed, contrary to the requirements of section 163(3)(c) of the Act, because:
- (a) it refers to an unidentified non-party - the "Contractor" - and confers rights and obligations under the contract in respect of the unidentified non-party;
- (b) it purports to assign to "the Contractor" who is not a party to the contract, the rights of persons on whose behalf the respondent is acting, who are also not party to the contract, to collect all charges and payments from the consumer. This is apparently regardless of whether the "charges and payments" arise under the contract or by other contracts or reasons. The term does not specify the respondent's authority to assign such rights, in circumstances where the authority to assign is not self evident;
- (c) having assigned the respondent's right to collect all charges and payments from a consumer to an unidentified non-party - "the Contractor" - it inconsistently includes terms that purport to empower the respondent to seize, retain, or defer or refuse delivery of any goods or to sell all or any of the goods to recover payment of outstanding charges;
- (d) it contains terms that are inconsistent:
  - (i) Term 11(c) which provides that: "the method, route and time by which the carriage of Goods or provision of services under this contract are performed shall be at the absolute discretion of the [respondent]." (Emphasis added);
  - (ii) Term 14(a) which provides that: "all quoted prices are for the performance of the work specified in accordance with the Warranties implied by the Trade Practices Act 1974." One of the warranties implied by the is, relevantly, to the effect that, where a consumer expressly or by implication makes known to the corporation the result that the consumer desires the services to achieve, there is an implied warranty that the services supplied under the contract for the supply of the services will be are of such a nature and quality that they might , except where circumstances show that the consumer does not rely, or that it is unreasonable for the consumer to rely, on the corporation's skill or judgment. (Emphasis added); and

[59]

The respondent, whether by itself, its officers, employees or agents or howsoever otherwise, be restrained from using the terms set out in paragraphs 2 to 8 inclusive, above, or any terms to similar effect in any contract, whether or not in writing and whether of specific or general use, to supply goods or services of a kind ordinarily acquired for personal, domestic or household use or consumption, for the purposes of the ordinary personal, domestic or household use or consumption of those goods or services.
The respondent, whether by itself, its officers, employees or agents or howsoever otherwise, be prohibited from printing or typing onto paper or typing by means of keyboard strokes onto an internet web site any consumer document that:
- (a) uses print or type that is less than 10 point font;
The Directors application that the respondent notify each of its customers of the terms of this order and place a notification on its website is refused.
The Directors application that term 8(c) be declared to be an unfair term is refused.

[60]

The respondent is a removalist. Its registered office and its principal place of business is in Knoxfield in the State of Victoria. Mr Matthew Matysik is its sole Director and shareholder, and is also the company secretary.
There are several ways in which intending customers can contact the respondent. Backloads advertises its services on the internet. Its website provides a facility by which a quotation can be prepared by a consumer and bookings can be made for its removalist services. The website also provides a copy of the conditions of contract.
Backloads can also be contacted by phone or email.
The contract between a consumer and Backloads may be completely oral, consisting only of phone discussions. It may also incorporate several different documents found by the customer on the internet, or posted or emailed between the parties. It may consist of a quotation prepared by the respondent in writing, accepted by the customer by telephone or email. It may include a combination of documents of various descriptions and oral representations made in telephone calls between the parties.
The Director brings this proceeding because the Director says that the contracts, whether written, oral, or a combination of both, entered into between the consumer and Backloads are consumer contracts and that various terms of those contracts are unfair. The Director therefore seeks an order from this Tribunal under Part 2B of the Fair Trading Act 1999 declaring those terms unfair. The terms which are impugned are terms 2(e), 8(b), 8(c), 9(b), 10(a), 10(b), 10(c), 11(a), 11(b), 11(c), 14(b), 14(c) and 14(f) of the contract.
The Director also asks me to declare that the contract itself is in breach of section 163 of the Act, because it is printed or typed in font which is too small. The Director further asserts that the contract is not clearly expressed, which is also a breach of section 163, because of certain inconsistencies and lack of clarity in the document as a whole.

[61]

Contrary to my assertion at the beginning of these reasons, Mr Matysik submitted that his company could not be described as a removalist at all. He suggested that the customers of Backloads were in reality contracting with one of 7000 owner- drivers, and that all that Backloads was doing was putting the customers in touch with those owner-drivers, and not contracting on its own behalf.
Thus, Mr Matysik asserted that Backloads' role in dealing with customers, either on the internet, on the phone, or by post, was not as a principal on its own behalf, but merely as an agent for these unnamed and unidentified drivers.
There is no support for this proposition in any of the material on the respondent's internet site, or any of the documents produced by the respondent, or in any of the evidence presented in this proceeding.
I therefore reject this characterisation and deal with the matter on the basis that the contracts under consideration are contracts made between the respondent holding itself out as providing the service of a removalist and its customers and not contracts with any third party.

[62]

The respondent suggests that even if the business it is engaged in is that of a removalist, its very name indicates to potential customers that it does not provide an equivalent service to others in the furniture removalist industry. It says that rather than providing a complete service as a removalist does, it utilises various cheaper methods of moving cargo. It does this by booking space on trucks which would not otherwise be utilised - where a truck engaged already to deliver a load might otherwise have made that delivery half-full - or might otherwise have made the return journey empty-handed.
No dictionary definitions of the word "backloads" were provided to me. I have searched for a dictionary definition of the term "backload" and have found the term defined in only one dictionary - the Macquarie Dictionary 4th edition, first published in 2005. This dictionary defines the term "backload" as being:

[63]

"to transport (cargo, passengers, etc) on a return trip from a major destination".

[64]

It also provides a definition for the two words "back load" as follows:

[65]

"a load which can be transported by a truck back to its base once its main load has been deposited, thereby making the trucks journey more profitable".

[66]

I had not myself heard of the terms "backload" or "back load" prior to presiding over this case, and I suspect many consumers would be in the same position. I do not consider it to be self-evident that the very name of the company connotes to a customer that the respondent was offering a different service than that of a furniture removalist, or describes with any clarity what that service might be. There is nothing in the evidence before me that suggests that this allegedly different role was notified to, or understood by, intending customers of the respondent.

[67]

The respondent's application under s60 of the VCAT Act

[68]

This proceeding against the respondent was commenced in late 2007. The points of claim and defence were filed in 2007 and the matter was the subject of directions hearings in late 2007.
The Director failed to comply with orders made at the directions hearing on 13 December 2007 to file witness statements and did not appear at the directions hearing on 13 December 2007.
The Director's failure to comply with these orders led to the Tribunal making an order on 7 February 2008 pursuant to s78 of the VCAT Act that the proceeding be determined in favour of the respondent and the proceeding struck out. The Director then made application for the setting aside of those orders and the reinstatement of the proceedings. That application was ultimately successful and the proceeding was reinstated on 20 May 2008.
Since that time the proceeding has been prepared by the Director in accordance with the Tribunal's directions, and in particular the respondent has been served with ten affidavits in support of the application. Since the proceeding was reinstated the file shows that it has been the respondent, not the applicant, who has failed to comply with orders of the Tribunal. These failures have led to the proceeding being adjourned from its scheduled hearing date and finally listed for hearing before me on 25 November 2008.
On that date the respondent sought a further adjournment, Mr Matysik saying that he wished to produce a great many witnesses to give evidence in the application and needed time to prepare his case.
After hearing argument, I ordered that the applicant present its case on 25 and 26 November 2008. I further ordered that at the conclusion of the applicant's case the proceeding be adjourned to 1 April 2009 to give the respondent plenty of time to undertake the preparation that he had outlined and to arrange to call his witnesses. I made other procedural orders for the filing of documents.
The matter commenced again before me on 1 April 2009 and continued on 3 April 2009. As the closing argument in his submissions Mr Matysik made application to me under s60 of the VCAT Act that certain parties should be joined to this proceeding. He identified the parties to be joined as follows:
1. The Australian Furniture Removalists Association. He said that that body should be joined to the proceeding because an adverse decision would impact on most of the transport industry in Australia and that the Australian Furniture Removalists Association was the official body of removalist experts in Australia. He said that AFRA was the force behind an Australian standard for furniture removalist contracts and that AFRA's contract has been endorsed by the Consumer Affairs Victoria website.

[69]

(a) that the person ought to be bound by, or have the benefit of, an order of the Tribunal in the proceeding, or

[70]

(b) the person's interests are affected by the proceeding, or

[71]

[72]

I announced to the respondent at the conclusion of the hearing that his application for joinder under s60 was refused. The reasons that I have refused this application follow below.
It is not my view that any other person named by the respondent as a potential party ought to be bound by or have the benefit of any order which I may make in this proceeding. The orders sought by the Director are not orders which will apply generally across the industry. They are orders which, if made, will apply solely to this respondent.
The proceeding before me is an application by the Director to declare certain terms which are said to be contained in the contracts used by this respondent to be unfair. In deciding whether or not the impugned terms are unfair I am required by the legislation to have regard to those terms as they are used in the particular contract of which they form part, and in the context of that contract. Subject to considerations of a general nature which I will refer to in the body of this judgement, my purpose is not to examine every contract in the furniture removalist industry, or every term of every contract in the furniture removalist industry. My task is to examine the particular terms which are the subject of this application and determine whether or not they are unfair terms within the meaning of s32W of the Fair Trading Act.
Further and for the same reasons it is not my view that any of the persons named by the respondent are affected by this proceeding. Whether or not any term in any contract used by them is an unfair term is a question that will depend upon the application of all the principles set out in s32W and 32X to their individual contracts. It may well be that other furniture removalists may be very interested in the outcome of this proceeding. They will not, however, be affected by the proceeding unless the Director seeks to take action against them in respect of their own terms.
Finally in my view it is not desirable that any other person be joined as a party at this late stage of the proceeding. This application was made at the very conclusion of this proceeding. It is a proceeding which has been on foot since late 2007. It is a proceeding in which all the evidence has now been heard and all witnesses cross-examined. The respondent has known for a long time both about the essential nature of the proceeding and also about the possible applicability of s60 of the to this proceeding.

[73]

In previous cases before me, I have discussed the nature of this proceeding and its relationship to the scheme of consumer protection in Australia. I required the applicant to make submissions fully on this issue before me, but I do not intend to reproduce this material as I have dealt with it in previous applications and I regard it as being relatively uncontroversial.
Proceedings under Part 2B are in the nature of public interest proceedings. They are not brought in order to determine individual consumer disputes. They are brought for the protection of the public interest in order to challenge, for the public good, the use of unfair terms in consumer contracts.
Thus, although evidence has been presented to me of particular consumer transactions with Backloads, it is not necessary for me to make a finding as to the ultimate legal responsibilities of each party arising out of those individual consumer transactions. It was apparent to me in the hearing that Mr Matysik had difficulty comprehending this distinction, and this is understandable, for it is unusual for sworn evidence to be given before a Tribunal without the Tribunal being obliged to finally determine all of the legal issues which are raised in that sworn evidence.
Section 32Y of the Act provides that a term which I declare to be unfair is void, but that the contract in which such an unfair term exists will continue to bind the parties if it is capable of existing without the unfair term.
This underscores the fact that I am not making a decision principally to affect the contractual obligations of any individual consumer. Whether or not an individual consumer contract is affected by my decision will be a matter for the individual concerned. I need to make it clear that I am not asked by the Director to make any order which directly affects the legal remedies of any of the deponents of the affidavits. Each of those persons may have their own remedy against the company if they choose to avail themselves of it.

[74]

The scope of the evidence I have heard in this application

[75]

As I have detailed, I commenced hearing this matter on 26 November 2008 and on the first day of hearing the respondent made application for the matter to be adjourned. He said that this was because he wished to introduce wide-ranging evidence to support his defence of this application. He made this application against a background of having failed to comply with earlier orders that I had made for the respondent to file and serve any witness statements on which it sought to rely well before the hearing date.
At the time of making orders on 26 November 2008 I explained to Mr Matysik that he would need to file witness statements by 14 February 2009.
Mr Matysik did not file any witness statements. However, he filed a lengthy document and a handwritten note. The note reads as follows:

[76]

"The following witnesses may be called upon to give evidence regarding the fairness of the contract being examined."

[77]

There followed the handwritten names of 54 persons.
At the applicant's request I listed the matter for a directions hearing on 17 March 2009 to consider appropriate orders to be made in relation to the respondent's evidence, having regard to the receipt of the document and the handwritten note.
The respondent did not appear at that directions hearing. At the directions hearing I ordered that the lengthy document filed by the respondent stand as the witness statement of Michael Matysik and also as the submissions on behalf of the respondent. The material filed did not appear to be in any way connected with any of the 54 persons named by the respondent. I ordered that the respondent not be granted leave to call any evidence other than that of Mr Michael Matysik at this hearing.
The material filed by the respondent is wide-ranging and repetitive. The Director has made application for the exclusion of all this evidence on the grounds of relevance. The Director has augmented his submission with reference to observations of the High Court of Australia in Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd 219 CLR 165.
That case concerned the question of whether or not a binding contract had been entered into in circumstances where a person had signed a document knowing that it was intended to affect legal relations between the parties and it contained contractual terms but where that person had not actually read the document.
The High Court held that it was immaterial that the person had not read the document and the other party did not have to show that due notice had been given of those terms.
In the course of discussing those matters the Court said this:

[78]

"A striking feature of the evidence at trial, and of the reasoning of the learned primary judge, is the attention that was given to largely irrelevant information about the subjective understanding of the individual participants in the dealings between the parties. Written statements of witnesses, no doubt prepared by lawyers, were received as evidence in chief. Those statements contained a deal of inadmissible material that was received without objection. The uncritical reception of inadmissible evidence, often in written form and prepared in advance of the hearing is to be strongly discouraged. It tends to distract attention from the real issues, gives rise to pointless cross-examination and causes problems on appeal where it may be difficult to know the extent to which the inadmissible material influenced the judgement at first instance."

[79]

In Codelfa Construction Pty Ltd v State Rail Authority of NSW [1982] 149 CLR 337 at 352 Mason J observed:

[80]

"We do not take into account the actual intentions of the parties and for the very good reason that an investigation of those matters would not only be time-consuming but it would also be unrewarding as it would tend to give too much weight to these factors at the expense of the actual language of the written contract."

[81]

Accordingly the Director made application that I should refuse to accept the written material filed by the respondent as evidence in this case.
My task is, however, not synonymous with the task of the primary judge in Alphapharm.
The respondent in this case is not represented by solicitors. I have attempted at previous directions hearings and during this hearing to explain to Mr Matysik the matters which I am required to consider in this application. From the repetitive and irrelevant nature of much of the material which he has filed, I am not confident that my explanations have been fully understood.
Therefore the only course open to me is to accept the material that has been filed on behalf of the respondent and do the best that I can to distil the respondent's case from that material and consider that case in the light of the legislation and the evidence I have heard. I have therefore determined to accept the written material from the respondent. I was, however, not disposed to allow the respondent to re-open its case to call persons whose connection with the case appears tenuous.

[82]

The Director presented evidence from several consumers who had entered into transactions with the respondent.
Joanne Hogan made contact with the respondent in about late June of 2006. Initially she carried out an internet search to find a removalist and obtained a telephone number of the respondent.
She telephoned the respondent around the end of June 2006 and spoke to a member of the respondent's staff. She advised that she needed to move her furniture and provided the staff member with her contact details and a list of all the items which needed to be moved. She was given a telephone quote in the sum of approximately $350.
After making some enquiries and realising that the respondent had offered the cheapest quote, she telephoned again on the same day to accept the quote and booked the job in for 15 July 2006.
She telephoned the respondent again in early July 2006 to add a scooter to the list of items to be moved and obtained a revised quotation of $482 to include the cost of moving the scooter. It appears that her father also had a telephone conversation with the respondent to add the cost of insurance to the quotation.
Ms Hogan never received any written document from the respondent prior to the collection of her goods and did not see any terms or conditions of contract. On 15 July 2006 the respondent collected her goods from the property and was paid the sum of $572, which amount included $88 insurance arranged by her father. She received a handwritten receipt for the goods when she asked for a receipt for payment.
Ms Hogan deposed that many of the items which were the subject of the contract were missing. These items were contained in three large striped zip bags. The balance of her affidavit details her attempts to find the whereabouts of her items and to make a claim on the insurance which she had effected through the respondent company. It took her five months to locate the missing goods. The only occasion on which she sighted the company's terms and conditions was on the back of a letter addressed to her father dated 1 August 2006 - a fortnight after the proposed delivery date and on the letterhead of Interstate Australia-wide Furniture Removal & Taxi Truck Services, but referring to the respondent's website and ABN and ACN numbers.
Marwa Khalaf also made contact with the respondent after conducting an internet search and obtaining the respondent's telephone number.

[83]

As I have outlined, the respondent did not prepare witness statements but instead provided a great deal of written material as his evidence in chief. Mr Matysik was cross-examined briefly by counsel for the Director in relation to various matters.
Broadly, the evidence of the respondent was as to the type of business run by the respondent and its place in the market. Mr Matysik provided me with handwritten documents explaining the make-up of costing in the transport removalist industry. That evidence was directed to establishing that this respondent offers a much cheaper alternative for furniture removal than the major furniture removalist companies.
Mr Matysik identified all the components he expected that a removalist company would use in costing an individual job, and explained that the respondent was able to charge significantly lower prices than these estimates because its prices were based not on the full overheads and component costs but only on the costs of loading and unloading.
He used the load from Ballarat to Coburg which had been described in the evidence of Marwa Khalaf as an example of the respondents pricing structure. He suggested that if that job had been costed from start to finish it would include the cost of a driver, the cost of an offsider to travel with the driver, the cost for two men for one hour to load the items, two hours to drive to Melbourne, one hour to unload and two hours to drive back. It would also involve other expenses such as extra waiting time for employees to arrive, the cost of moving trucks in and out of the depot and the cost of refuelling. He then identified all of the overheads which would be contributed by an office operation and the costs of insurance.
He suggested that Marwa Khalaf's job should have been charged out at the rate of approximately $1,100 if all of those variables were taken into account. He estimated that Marwa had saved $300-$500 over all other competitors by accepting the respondent's quote.
He said the capacity of the respondent to offer such a low price depended upon the way in which the respondent's business was organised. Firstly he relied on his submission that the respondent's business was not that of the furniture removalist per se. He described the business as being that of an agent for over 7,000 contractors. These contractors were owner-drivers. Backloads would identify an owner-driver who had space in a truck and who could offer a cheap rate on the understanding that the delivery would be fitted in with the driver's other commitments.

[84]

What use should be made of a comparison between the contracts impugned in this proceeding and other contracts in this or similar industries?

[85]

Mr Matysik presented as evidence various other contracts. He presented a printed version of an AFRA contract which he said was a contract designed by and recommended by the Australian Furniture Removalists Association and endorsed by the Department of Consumer Affairs.
He also supplied copies of contracts used in other industries, and has referred extensively in argument to what he says are almost identical terms to the terms impugned in this proceeding. I did not hear any evidence from any person other than Mr Matysik in relation to these contracts or the circumstances of their use.
It appeared to me that he introduced these contracts for two main reasons.
Firstly, he wished to demonstrate that there were contracts being used in the furniture removal industry and in other industries which were far harsher on consumers than the contract terms used by this respondent. He suggested the applicant should direct her attention to those contracts rather than to his contract.
This is clearly an irrelevant consideration for me. This proceeding does not concern whether or not other contract terms are unfair. I take the view that even if the respondent was able to establish that other traders, in other industries or in the removalist industry, may be using more harsh terms than those used by this respondent, such a finding does not assist me to ascertain whether the terms used by this respondent which are impugned in this proceeding are unfair.
Secondly, he wished to demonstrate that there were good commercial reasons why he used each of the terms which are impugned in this proceeding, and that this argument was buttressed by the fact that other traders used similar terms. Where this argument was put I have considered it. However, the argument was undercut because Mr Matysik could not demonstrate one instance in which exactly the same term was used as one of the terms impugned in this proceeding. In all cases the terms which he relied on were different in some respect. Generally the difference contained the crucial element that has led the Director to challenge the term.
The Director challenged Mr Matysik's assertion that the AFRA contract was endorsed by the Department of Consumer Affairs. As I have noted, there was no evidence before me that any of the contracts presented to me were in the form currently used in the marketplace apart from Mr Matysik's assertion that he had retrieved the contracts from various websites. There was also no admissible evidence that the AFRA contract was endorsed by the Department of Consumer Affairs.

[86]

The Director has provided me with a document setting out the orders which the Director seeks me to make in this proceeding. In that document the Director describes the respondent's contract as being constituted by the following:
1. A quotation either in writing or oral identifying location of the goods and the destination to which they are to be carried, an inventory of the goods, the price at which the consumer's goods will be carried and an estimate of the approximate transit time; and
2. Incorporating by reference the respondent's conditions of contract on the respondent's website; and
3. An acceptance of the offer, either in writing or oral by the consumer.
Mr Matysik gave evidence that in his experience each of the contracts he enters into with his clients is unique. Sometimes such contracts are completely oral in that they consist of a telephone enquiry and a delivery being made the following day before any documents regarding the enquiry are generated. In some circumstances they incorporate the conditions of contract on the website. In some situations they involve the final acceptance being made on behalf of the respondent. In other situations the final acceptance is made on behalf of the consumer.
Mr Matysik also gave evidence that he considers that in some circumstances a document entitled 'Handy Hints' which is on the respondent's website also forms part of the contract. These handy hints include issues about safety regarding the transportation of hazardous goods and issues about packaging. They also refer to the need to have a representative of the consumer available at the time of pick-up and delivery of the goods to be moved.
The existence of the Handy Hints document and its relationship to contracts entered into by the respondent was not put to the Director's witnesses in this case and it is not referred to in the document headed "Conditions of Carriage" on the respondent's website. However, Mr Matysik's evidence was that depending on the circumstances it may be incorporated into an individual contract.
The question of whether this document is to be incorporated into the contract may make a difference in individual cases. It may be that some of the terms impugned in this proceeding may need to be read in conjunction with the contents of the Handy Hints document. Mr Matysik submitted that this was so in respect of terms 11(a) and 11(b). I will deal with this further when discussing the individual terms.

[87]

A consumer contract is defined in s3 of the Fair Trading Act 1999. A consumer contract is, pursuant to that section, an agreement, whether or not in writing, and whether of specific or general use, to supply goods or services of a kind ordinarily acquired for personal, domestic or household use or consumption, for the purposes of the ordinary personal, domestic, or household use or consumption of those goods and services.
It is clear therefore that the fact that the Backloads contract may be partly in writing and partly oral, or constituted by several different documents, does not exclude it from being a consumer contract.
The Director submitted that the services to be provided under the contract, that is the services of removal and transport of household items and effects, are services of a kind ordinarily acquired or used for personal, domestic or household use or consumption and that the services were used for the purpose of ordinary personal, domestic or household use or consumption of those services.
The respondent has submitted that the contract is not a consumer contract. It says that the contract in question is used mainly for interstate transport services. It says that interstate transport services are not part of the "ordinary activity" within the lives of the general population. It suggests that most people might only use transport services once or twice in their lives, and may never use interstate transport services at all.
The respondent suggests that there must be an element of regular use before an activity can be described as a kind ordinarily acquired for personal, domestic or household use or consumption.
Mr Matysik asserted that the respondent's services were used for the carriage of a wide variety of goods, many of which were not household or consumer goods. He was unable to give me any specific information as to the percentage of household or consumer items carried, or the percentage of transportation work performed for companies, rather than for individuals.
The respondent suggests that if its contract were characterised as a consumer contract, this must also apply to many other contracts in the transport industry, and this would not be an outcome contemplated by this legislation, which he said was designed to cover simple consumer-trader relationships. The respondent suggested that in contrast its contracts cover complex issues. The subject matter of its contracts includes the prospect of derailment and large-scale crashes involving loss of the items to be carried. The respondent said that such incidents cannot have been contemplated in an agreement relating to ordinary consumer activity.

[88]

S32W of the Fair Trading Act provides that a term in a consumer contract is to be regarded as unfair if, contrary to the requirements of good faith and in all the circumstances, it causes a significant imbalance in the parties' rights and obligations arising under the contract to the detriment of the consumer.
Section 32X attempts to give some guidance to the Tribunal in deciding whether or not any particular term in a consumer contract is to be regarded as unfair. It provides that without limiting the terms of s32W, the Tribunal may take into account whether the term was individually negotiated, whether the term is a prescribed unfair term (this does not apply in this case) and whether the term has certain other objects or effects.
The Director submitted that to the extent that the respondent's contracts were in writing, the contract was one for general use and in a standard form. The terms and conditions are placed on the respondent's internet site. There is no evidence that the terms and conditions are ever negotiated individually by the respondent. The evidence of Joanne Hogan was that she never saw any written terms and conditions, and her contact with the respondent was solely by telephone. Marwa Khalaf and Bardia Ghostine gave evidence that they each received a letter enclosing the terms and conditions in response to their internet enquiry. The circumstances in which contracts came to be entered into by Khalaf and Ghostine demonstrate that to the extent that the respondent's contracts were in writing, consumers were presented with "take it or leave it" standard form contracts.
I have suggested in previous cases that the question of whether the term was individually negotiated might be taken into account in the sense that if a term was in fact individually negotiated its apparent unfairness on its face may be discounted because of the knowledge that the parties had each voluntarily entered into the term after informed negotiation.
A similar approach was taken by the Supreme Court in Jetstar Airways Pty Ltd v Free [2008] VSC 539. and also in AAPT (2006) VCAT 1493, cases to which I will shortly refer in detail.

[89]

I have dealt with the application of s32W of the Act in several previous cases, but without, in those cases, having had the benefit of any authority, apart from that of the President of this Tribunal, then Justice Morris, in AAPT. This section, and the scope of Part 2B generally, has now also been considered by a single judge of the Supreme Court of Victoria in Jetstar v Free. There are significant differences between the approach taken to section 32W in each decision.

[90]

In AAPT, the Director applied to this Tribunal to have certain terms of a standard form mobile phone contract declared unfair. One of the suggested aspects of unfairness was said to be the power of the respondent to unilaterally vary the contract conditions, or suspend the service offered, where the respondent changed its own supplier.
The respondent in that case submitted that the alleged unfairness should be looked at in the context of the mobile phone industry as a whole, and in particular the complex contractual arrangements within the communications industry. The respondent's argument was that the impugned terms reflected the terms to which it was itself bound with its own suppliers. The respondent suggested that the commercial framework of the entry into the contracts needed to be taken into account in considering whether a term was unfair. It submitted that the industry framework was a relevant factor to take into account because it showed that the respondent was not acting contrary to the requirements of good faith in imposing the term on the consumer.
Thus in AAPT it was necessary to consider the meaning of the words "contrary to the requirements of good faith" and "in all the circumstances" as they appear in section 32W.
The Director submitted in that case that the words "contrary to the requirements of good faith", should not be read as importing some additional element of good faith as an extra element to be taken into account in determining whether or not a contract was unfair. Instead, the use of the words was simply to describe what a significant imbalance in the parties rights and obligations was.
The issue is not just one of semantics. If the concept of the term being "contrary to the requirements of good faith" is viewed as a separate element of the definition, then a very broad range of matters may potentially be relevant in weighing up each term. These matters may include (depending on the term and its surrounding context) questions of the subjective intent of the trader, industry practice, the suppliers own relationships with its trading partners, the traders position in the industry, and so on.
Many of these factors may also be argued to be important because of the words "in all the circumstances" which also appear in the section. That term is broad enough to allow consideration of every conceivable aspect of the consumer transaction itself, and also all the circumstances surrounding the industry in which the trader operates, and perhaps the industrial framework generally. A liberal application of those phrases might be to take into account the market in which the supplier of the services operated. This might include such considerations as relevant industry practice, the use of standard form contracts in the industry, the convenience to both parties of industry usages and the relationship between the supplier and its own suppliers, or the degree of difficulty within the market of monitoring various behaviours.

[91]

"The manner in which the Parliament has referred to the requirements of good faith is curious. The Parliament has not said that a term is to be regarded as unfair if the term is contrary to the requirements of good faith. Rather the manner of expression suggests that if a term causes a significant imbalance in the parties' rights and obligations arising under a consumer contract, to the detriment of the consumer, this would be contrary to the requirements of good faith. Thus, the manner of expression suggests the phrase is either surplusage or simply performs an adjectival role, designed to assist in the assessment of whether a term in a consumer contract causes an imbalance which is "significant". It is unlikely that the Parliament intended the words to be surplusage. Hence it is likely that the Parliament intended that the reference to the requirements of good faith play a role in determining whether the nature, or extent of an imbalance should be regarded as significant."

[92]

He does not appear to have considered in detail the role of the words "in all the circumstances".
As far as I can understand the passage set out above, it appears that Morris J accepted the Director's submissions that the words "contrary to the requirements of good faith" simply described what an unfair term would be, without adding any extra element to that definition. He concluded that the section simply confirmed that a term which caused a significant imbalance in the parties' rights and obligations arising under the contract to the detriment of the consumer would be a term which was contrary to the requirements of good faith.
The Director asked me to take into account that Justice Morris's conclusion was reached after hearing careful argument in a hotly contested case about the phrase "contrary to the requirements of good faith". In particular, the President carefully considered the history of the use of this term in English legislation, and discussed the application of what he considered to be persuasive English authority.
In AAPT itself, there does not appear to have been any discussion as to how the characterization of the concept of good faith as adjectival, or the application of the term "in all the circumstances", actually influenced the assessment of any of the evidence which was actually before the Tribunal. In part it appears that this was because His Honour had determined not to make declaratory or injunctive orders for other reasons.

[93]

The requirements of section 32X and 32W have now also been considered by a single judge of the Supreme Court in Jetstar Airways Pty Ltd v Free [2008] VSC 539.
That case was an appeal from a senior member of this Tribunal.
In that case the applicant at the Tribunal had sought that the Tribunal declare the term of the contract unfair so that she could avoid its operation against her.
It was not made clear either in the original decision or the appellate decision as to how the consumer could have had standing to make this application, given that applications under this Part may only be made by the Director of Consumer Affairs, but that point does not appear to have been argued in the appeal.
Mrs Free had made an on-line booking for plane tickets. It was a condition of the booking that the tickets were not transferable to any other person.
After having made the booking, Mrs Free found that one of the persons in whose name she had made the booking was ultimately not able to use the tickets, and so she sought to transfer them to another person, in contravention of this condition.
The question for the Tribunal at first instance, and the Supreme Court on appeal, was whether the term limiting her right to do this was an unfair term.
In the course of deciding the appeal Justice Cavanough considered the reasoning in AAPT and in particular the meaning of the words "contrary to the requirements of good faith_"_ in section 32W. In the view of Justice Cavanough, the true role of that expression was misunderstood in AAPT.
He considered the requirements of good faith and significant imbalance to be quite separate elements and expressly rejected the suggestion that the words "contrary to the requirements of good faith" performed only an adjectival role, rather than constituting an element for separate consideration.
He then went on to consider the way in which that term could be applied in the context of Part 2B. He considered that the various matters set out in section 32X showed a common theme which could be used to amplify the requirements of good faith. He said that each paragraph of s32X supplied an example of a term which was not only one-sided but which also would tend to ''.

[94]

'A term which purported to authorise a supplier to resile from an important contractual promise, at least if the term were not specifically drawn to the consumer's attention beforehand, would surely be apt to create a surprise on the part of the consumer. Depending on the circumstances, the same might well be characterised as "unfair surprise ...".

[95]

On the other hand, I do not say that, to be regarded as contrary to the requirements of good faith, the operation of a term must necessarily derogate from the supplier's obligations or the consumer's rights under other terms of the contract. For example, I would accept that a term imposing a discrete, unusual, one-sided burden on a consumer might create an "unfair surprise" in all the circumstances and might thus give rise to a finding of contrariety to the requirements of good faith "

[96]

His Honour specifically considered the use that could be made of business practices in an industry, and the surrounding circumstances to the transaction, in considering the unfairness of a contract term. He said:

[97]

'In my view s32W is centrally concerned with the fairness of the terms of contracts in themselves, in the light of broad business practices in the relevant industry, and in the light of the circumstances in which each relevant contract was made, and not so much with the multifarious personal interests of individual parties to which their contracts might directly or indirectly relate.'

[98]

And at paragraph 121 of the judgment he continues:

[99]

'However, I would accept that a contractual term should not be regarded as unfair unless, among other things, the inclusion of the term is found to involve a departure from good standards of commercial morality or practice.'

[100]

Justice Cavanough considered that in the case before him, the Tribunal Member had erred by applying the more restrictive interpretation of the section outlined by Justice Morris in AAPT. I understand him to have decided that, although no particular factual issue of good faith had been argued before the Member, the Member's failure to focus on the issue of good faith had led to error.
He also found that a significant aspect of the transaction had not been taken into account. This was that the fare offered by the respondent was a special introductory fare, and extremely cheap. Justice Cavanough found that the Member had not balanced this aspect of the transaction against the restrictive nature of the term. He commented:

[101]

"it is well recognised overseas that a special price reduction can justify what might otherwise appear to be a harsh or strict or "unfair" term."

[102]

Justice Cavanough did not go on to decide in that case whether or not the term was in fact unfair. He said only that the balancing process must take place in accordance with the principles which he had outlined, and remitted the matter to the Tribunal.
Thus the decision in Jetstar v Free is authority for the proposition that I must address the question of whether or not the term is contrary to the requirement of good faith as a separately identifiable element of the test of unfairness under s32W and that in doing so I should consider the question of whether or not the term involves the departure from good standards of commercial morality or practice.
It is also authority for the proposition that a term otherwise justifiable in the marketplace might be characterised as unfair if it came as an "unfair surprise" to a consumer.
The Director criticises the decision in Jetstar as having not taken into account an analysis of the role of Part 2B within the Fair Trading Act itself, and within the context of Australian consumer legislation. He pointed out that the cases cited in Jetstar concerning the definition of good faith emanate from jurisdictions which have no Part2B equivalent. He warned against uncritically applying foreign law without considering its context.
In the Director's submission Part 2B must be read in accordance with the principles to be found in Project Blue Sky v ABC 1998 HCA 28 - that is, that legislation must be construed on the prima facie basis that its provisions are intended to give effect to harmonious goals, and that where conflict appears to arise from the language of particular provisions, the conflict must be alleviated, as far as possible, by adjusting the meaning of the competing provisions to achieve that result which will be to give effect to the purpose and language of those provisions whilst maintaining the unity of all the statutory provisions.
The Director relied also on that case for the further proposition that whilst the duty of a court or tribunal is to attempt to apply the grammatical meaning of words in a statute, an overriding consideration is the duty to give the meaning to the words that Parliament intended them to have, a duty which may in some cases require a meaning to be ascribed to words which may not be its dictionary or grammatical meaning.

[103]

'The word "significant" simply means important or of consequence. It does not mean substantial. It is not a word of fixed connotation and besides being elastic, is somewhat indefinite. However, in its context, it is designed to identify an imbalance, to the detriment of the consumer, which should be regarded as unfair. In this sense the definition is circular. But it is impossible to avoid the notion of fairness in determining whether a term causes significant imbalance, even though this exercise is designed to ascertain whether a term is unfair.'

[104]

In Jetstar, Justice Cavanaugh disagreed and expressed the view that the words 'significant imbalance' was a quantitative concept which could certainly carry the meaning 'substantial'.
In looking at the terms in this case, I doubt that there is a practical difference between describing any of these terms as causing a "substantial imbalance", or alternatively an "important imbalance". This question may be of importance if I had been asked to consider terms in which the unfairness alleged was less clear than in the terms I have analysed below.

[105]

'This agreement shall be governed by and interpreted and enforced in accordance with the laws applicable in the Australian Capital Territory. This agreement shall be deemed to have been entered into in the Australian Capital Territory.'

[106]

The Director says that this term is unfair because its clear object and effect is to exclude the operation of Part 2B of the Fair Trading Act. The Director outlined the general law in relation to the circumstances of the creation of contracts, and sought to demonstrate that had it not been for this term then it was clear that each of the contracts entered into with the respondent would be governed by the laws of Victoria.
The Director relied upon the application of common law principles reflected in cases such as Entores LD v Miles Far East Corporation 2QB 327. In that case_,_ in the course of considering where a contract constituted by telex was made Lord Denning referred to what he described as clear law of contract throughout the common law world in these terms at p333-334:

[107]

"My conclusion is, that the rule about instantaneous communications between the parties is different from the rule about the post. The contract is only complete when the acceptance is received by the offeror; and the contract is made at the place where the acceptance is received."

[108]

The same principle was expressed in the judgment by Lord Justice Burkett in the following terms at p335:

[109]

"The ordinary rule of law, to which the special considerations governing contracts by post are exceptions, is that the acceptance of an offer must be communicated to the offeror, and the place where the contract is made is the place where the offeror receives the notification of the acceptance by the offeree".

[110]

This case was cited in a decision of the commercial list of the Supreme Court of New South Wales in Mendelson-Zeller Co Inc v T&C Providores Pty Ltd [1981] NSWLR 366. In that case the goods were delivered in Sydney but payment was made for the goods in the United States of America. In that case the question was whether or not the proper law of the contract which was the subject of the proceeding was the law of New South Wales or the law of the State of California.
Justice Rogers decided the question by examining which system of law the transaction which he was considering had its closest and most real connection. He considered the relevant circumstances to be the place of contracting, the place of performance, the places of residence or business of the parties, and the nature and subject matter of the contract.
The Director's first contention in the case before me was that as the evidence in this case demonstrates that the acceptance of each contract occurred by the respondent at its principal place of business and registered office, which was in Victoria, I should find that the proper law of the respondent's contract was in fact the law of Victoria.
Thus term 2(e) was an attempt by the respondent to artificially require that the contract be interpreted in accordance with the law of the Australian Capital Territory contrary to the operation of the general law of contract.
Mr Matysik relied upon the evidence which he had given as to the multifarious ways in which contracts between Backloads and consumers can be concluded. Mr Matysik suggested that the contract could be accepted anywhere in the world and could be accepted by either Backloads or the consumer, as offers and counteroffers were often made between the parties.
The Director's second contention was that even if this is so, and whatever view I come to on the law which in fact governed each individual contract, the vice of clause 2(e) was that it sought to automatically preclude the operation of Victorian law, and thus the protection of the Fair Trading Act, whatever the real legal position might be.
Thus, insofar as the respondent enters into contracts with consumers in Victoria, or otherwise enters into contracts which would be governed by the laws of Victoria, this term deprives consumers of the protection of the , and particularly the protection of Part 2B and section 163 of that Act, as the ACT has no equivalent to those provisions in its consumer legislation.

[111]

'Sections 32ZA, 32ZC, 163(4), and the relevant definition sections of the Fair Trading Act 1999, and indeed the entire Act, do not form part of the law of the ACT.

[112]

Consequently any contract entered into which contains these conditions is automatically precluded from being subject to any provision of the Victorian Fair Trading Act 1999.'

[113]

The Director says that I should infer from this paragraph and from the statements made by Mr Matysik in this case that the respondent deliberately chose the law of the ACT as the applicable law specifically because it had no equivalent to Part 2B of the Fair Trading Act, and in order to deny consumers the right of protection under the Fair Trading Act.
The respondent says that it is well-known in commerce that many companies use clauses in which a particular jurisdiction is nominated as the applicable law. Although he was not able to point to any particular contracts in which such a clause appears, in my view I should take judicial notice that this is so.
The Director pointed out that any terms of a similar nature to clause 2(e) which may be used in commercial contracts are not affected by the provisions of Part 2B of the Act.
The Director further submitted that if there were any clauses in consumer contracts similar to term 2(e) which had been individually negotiated, where the choice of law was a matter of genuine negotiation, those terms were unlikely to be defined as unfair. The Director suggested that the unfairness in this case arose because the respondent had unilaterally and without any warning to the consumer chosen the law of a jurisdiction to apply to its contract which had no necessary connection with the transaction, and had chosen it in order to exclude the operation of the Fair Trading Act.
In my view term 2(e) of the contract is unfair. The term causes a significant imbalance in the parties' rights and obligations under the contract to the detriment of the consumer. It does this because it unilaterally declares the law to be applied to be that of the Australian Capital Territory without regard to the proper law to be applied under general contractual principles. It is unfair because it artificially imposes the law of the Australian Capital Territory onto every contract whether or not the contract could by law be characterised as being made in the Australian Capital Territory.
There are no circumstances which have been the subject of evidence which justify the inclusion of this clause. In particular I reject the respondent's evidence that the term was inserted for marketing purposes. This evidence was in my view fanciful. I find as a fact that it was inserted to avoid the operation of the Victorian .

[114]

Extraterritorial application of the Fair Trading Act

[115]

As a corollary to its arguments, the respondent asserted that this Tribunal was without jurisdiction to hear this application as the application concerned the construction of contracts which were deemed by the operation of term 2(e) to have been made in the ACT, and thus the Fair Trading Act , being legislation of the Victorian Parliament, did not apply to them.
Section 6 of the Fair Trading Act provides that the Act applies within and outside Victoria and that it applies outside Victoria to the full extent of the extraterritorial legislative power for parliament.
If this section was enacted by Victorian Parliament without Parliament having the constitutional power to do so then this legislation would be beyond power and void with the result that the provisions of part 2B would apply only to contracts held to have been made in Victoria.
The High Court has considered the ambit of the extraterritorial application of state law in Union Steamship Company of Australia Pty Ltd v King HC of A 1988 at p2.
At page 13 of the judgment the High Court applied the following passage of Dixon J in Broken Hill South v Commissioner of Taxation (NSW) 56:

[116]

"It is within the competence of the state legislature to make any fact, circumstance, occurrence or thing in or connected with the territory the occasion of the imposition upon any person concerned therein of a liability to taxation or of any other liability. It is also within the competence of the legislature to base the imposition of liability on no more than the relation of the person to the territory. The relation may consist in presence within the territory, residence, domicile, carrying on business there, or even remoter connections. If a connection exists, it is for the legislature to decide how far it should go in the exercise of its powers. As in other matters of jurisdiction or authority Courts must be exact in distinguishing between ascertaining that the circumstances over which the power extends exist and examining the mode in which the power has been exercised. No doubt there must be some relevance to the circumstances in the exercise of the power. But it is of no importance upon the question of validity that the liability imposed is, or may be, altogether disproportionate to the territorial connection or that it includes many cases which cannot have been foreseen."

[117]

"It is sufficient for present purposes to express our agreement with the comments of Gibbs J in Pearce (1976) 135 CLR at p518 where His Honour stated that the requirement for a relevant connexion between the circumstances on which the legislation operates and the state should be liberally applied and that even a remote and general connexion between the subject matter of the legislation and the state will suffice."

[118]

In applying that authority to this case the Director says that it is clearly competent for the Victorian Parliament through the Fair Trading Act to apply the norms of conduct expressed in the Fair Trading Act to all businesses registered in Victoria and, having their principal place of business in Victoria, even when the subject matter of that business's dealings or the conduct that the business engages in has operation, application, or occurs outside Victoria.
I know of no other authority to the contrary and Mr Matysik was not able to demonstrate that this line of authority was wrong or inapplicable in this case.
Accordingly it is my view that by reason of the application of the Union Steamship principles, part 2B of the Fair Trading Act applies to all of the consumer contracts that the respondent enters into, even though some of those contracts may also be governed by the law of another state, because the registration of the respondents business in Victoria, and the physical location of the business in Victoria provide a relevant connexion between the circumstances on which Part 2B operates and the State of Victoria.

[119]

The second term impugned is clause 8(b) which reads as follows:

[120]

'If the information supplied is incorrect, inadequate, inaccurate or varied after a quotation has been given, the company may at its discretion perform the work strictly as per its quotation or vary its charges in accordance with a pro-rata adjustment based on the variation in the specified quantity, volume or weight of goods plus any variation of estimated loading and unloading times charged at the time rate.'

[121]

The Director says that should be remembered that this is a contract for the removal of a potentially large number of small household goods, in which the consumer is required under the contract to identify the precise goods to be moved. The Director says I should take into account that it is likely that accurate identification of a vast number of small items is likely to be very difficult. Estimates of this nature may well change and more goods may need to be added after the contract is concluded, and up until the time of removal and transport.
If, as this clause suggests, the consumer is required to perform the contract strictly in accordance with the quote, the Director says this may well lead to unfairness because the consumer is given no chance to vary the contract except by incurring a penalty, whereas there are other clauses of the contract which allow the trader to vary the contract without penalty - such as clause 11(c) (to which I will later refer).
The Director relied upon the evidence given by the witnesses Joanne Hogan, Marwa Khalaf, and Bardia Ghostine in this case to illustrate the likelihood that extra goods will often be identified to be added to the list of items to be moved after the contract is entered into, and the difficulties that this term causes in practice to the consumer.
Thus, the Director submitted, read in the context of the removalist industry, clause 8(b) unfairly penalised the consumer.
The respondent suggests that the clause is not very different from other clauses used in the industry, particularly the AFRA contract. The respondent suggested that its own term was much more specific than other clauses in use and this therefore meant that there was no uncertainty for the consumer as to what would happen if the consumer sought to add extra items to the list of goods to be moved.
Mr Matysik says he had previously employed a term which simply said that it would charge a fair price for any extras to be carried but that this term had been criticised by the Department of Consumer Affairs for uncertainty. Clause 8(b) was simply an attempt to spell out with certainty what would happen if a consumer sought to add extra items to be carried at the last minute.
The respondent also submitted that this clause should be read in conjunction with the fact that the price offered by the respondent was a low price, much lower than other prices in the market. This means that the respondent had very little room to manoeuvre, both literally, (in terms of space booked on trucks) and in terms of its own contractual arrangements with contractors.

[122]

'Delays and cancellations after arrival. When the loading or unloading process is delayed by over 30 minutes due to any factors outside the company's control, an additional charge at the time rate shall apply. Where a job is cancelled or postponed by the client on or after the day before pick-up is due, the client agrees to pay half of the quoted job charge plus any time spent at pick-up, charged at the time rate, subject to a minimum charge of two hours.'

[123]

The Director submitted that this term is unfair because it creates uncertainty for the consumer. It does not specify the period of time which will be initially allowed for the loading or unloading of the consumer's goods or the basis upon which the period of delay is to be calculated.
Further, it imposes an unreasonable burden on the consumer by making the consumer liable for a range of charges for delay where such delay may arise from circumstances beyond the consumer's control.
Thus, it has the object or effect of penalising the consumer but not the respondent for breach of the contract.
The respondent suggested that cancellation charges as were specified in this clause are necessary because once the space is booked in a vehicle, that job forms part of a viable interstate trip, and cancellations after a trip is established can impact on other customers and their times. Because of the way the respondent organises its business, late cancellations cannot easily be filled with last minute bookings.
The respondent suggested that other industries such as the airline industry had similar terms. The respondent says that in this clause it has attempted to spell out its cancellation terms precisely rather than just to provide for a reasonable amount in order to give some certainty to consumers.
This term is different to the AFRA contract in that the AFRA contract contains the word "reasonable".
The respondent says that this term has changed many times and now is not presently used in these same terms. Mr Matysik told me says that he previously used to utilise a term saying that the respondent would charge reasonable expenses where a consumer cancelled a booking. He now uses this wording to give flexibility to the respondent in recouping its costs of cancellation. Mr Matysik said that that word "reasonable" was not contained in section 8(c) because it did not need to be there as the respondent would act reasonably in any event.
Mr Matysik told me the impact on the respondent of a cancellation can be tremendous. He points out that if the job is cancelled close to the time of pickup the truck driver may have already incurred the cost of getting to the location to pick up and this can be especially costly if the trip is part of an interstate trip. He emphasised that the effect of cancellation is not like the effect of cancellation of an airline ticket where cancellation may only result in the loss of a single fare. The cancellation has a knock-on effect on other contractual arrangements.

[124]

'The company hereby assigns its rights and the rights of any persons on behalf of whom it is acting to collect all charges and payments from clients to the contractor. The contractor agrees to issue invoices and to collect all such charges and payments directly from the clients.'

[125]

The Director says that this term is unfair because it assigns to an unidentified non-party (described as "the contractor") all of the rights the respondent would otherwise have enforce the contract terms. In doing so it creates confusion and uncertainty for the consumer. It permits this unidentified non-party to issue invoices and collect charges directly from the consumer.
Who is this unidentified non-party? There appears to be no way provided in the contract for the consumer to find this out. The respondent's argument appears to be that this assignee is whichever truck driver actually carries out the pickup and perhaps also delivery of the goods. It is not clear from the evidence whether this will always be the same person. Mr Matysik submitted that this assignment clause reflects the fact that the respondent does not contract directly with the consumer, but passes on the consumer's contractual obligations to the contractor. The way in which this was said to occur was put in the vaguest of terms.
The respondent says that this way of doing business is extremely important to the consumer because it provides for a cost effective way of accessing removalist services. It says that clause 9(b) is central to this operation because the heart of what it offers is a facility for consumers to make their own contractual arrangements with the individual truck driver.
Mr Matysik suggested, without expanding on the idea, that this arrangement is similar to a franchise. He says that the AFRA contract does not contain a term such as this term because AFRA does not use the respondent's agency system.
It seems to me that the difficulty with the respondent's argument is that it is not apparent from any of the respondent's material or the conditions of contract that the respondent holds itself to be simply an agent or franchisor who introduces consumers to a contractor, nor that the contractual obligations under the contract are to be assumed by that contractor and not by the respondent.
The Director asks me also to note that this assignment purports to occur at the time of formation of the contract. The uncertainties caused by clause 9(b) are increased when clause 9(b) is seen in conjunction with clause 10 which provides that the respondent (not the assignee) is to have a lien on the consumer's goods until payment is received.

[126]

Paragraph 10 provides for the creation of a lien on behalf of the company in relation to the goods which are the subject of the contract. The impugned sub clauses read as follows:

[127]

'10(a) - All goods of the client, or carried on behalf of the client, that are received by the company shall be subject to a general lien for any monies owed by the client or the owner of the goods to the company or the contractor as a result of this agreement or any previous agreement between the company and the client or the owner of goods.'

[128]

'In order to exercise its rights under the aforementioned lien, the company shall have the right to seize or retain or to defer or refuse delivery of any goods that are the subject of this lien should circumstances arise that make it reasonable to conclude that the client is unwilling or unable to pay any due charges in the required form or at the required time and place.'

[129]

'Where the charges of the company remain unpaid for a minimum period of 28 days, the company may give 28 days written notice by certified or registered mail to the last known address of the client of intention to sell. If the amount owing is not paid within that further period the company may open any packages, DISPOSE OF THE GOODS or SELL ALL OR ANY OF THE GOODS by auction or by private treaty at its absolute discretion. Out of any monies arising the company may retain its charges and all charges and expenses of the detention and sale. It shall credit the surplus, if any, to the person entitled to it. Any such sale shall not prejudice or affect any other rights that the company may have to recover any outstanding charges due or payable in respect of such service or the said detention or sale.'

[130]

The Director does not complain about the concept of a lien itself. The Director submits that although these terms purport to create a lien, which is a device born of the common law, and subject to certain characteristics and limitations at law, these subclauses, when read together and in the context of the contract as a whole, in fact seek to create a different set of obligations which do not have the characteristics of a general lien at law, and produce a much harsher result.
For instance, one of the characteristics of a lien is that a trader who exercises it cannot pass on the costs of storage or detention of the goods held. This is usually a significant impediment to a trader who seeks to exercise a lien.10(c) gives this right to the respondent.
As another example, 10(a) purports to extend the right to a lien in respect of monies owed to the respondent by a person other than the consumer.
But further, these clauses allow the creation of a lien in circumstances where the company may have already assigned all of its contractual rights to a person other than the company (pursuant to term 9(b)) .
Thus, the Director says, these terms purport to extend the lien in an overreaching and excessive way to include past debts and debts due in relation to any previous agreement and to any other owner of the goods, and to do so where the respondent has already assigned all its rights and obligations under the contract to another unnamed person. The terms therefore use the word "lien" but do not in fact create a lien as that concept is known to the law.
The Director also complains that term 10(c) allows the respondent to make charges which are disproportionate to the legitimate charges that the respondent might other wise be entitled to make under the general principles governing the exercise of a lien by reserving to itself the right to sell the consumers goods by auction or private treaty at its absolute discretion.
The respondent has made several comments in its documents filed with the Tribunal as to the reason why lien clauses were inserted in the contract. Essentially the respondent says that the clauses are necessary in order to avoid consumers refusing to pay for goods once the work is done.
The respondent suggests that it is human nature to avoid paying when it is possible to do so. Mr Matysik gave evidence that although the contract provides that payment must be made by the consumer on pick-up, there are sometimes circumstances in which this does not occur, for example, if goods are picked up from self-storage and delivered to a customer's home. Mr Matysik estimated that some 25-30% of the Respondent's jobs were not paid for on pick-up.

[131]

"This term in practice is like a lot of the other stuff in this agreement. It's largely bluff to force compliance."

[132]

The Director relies upon comments such as this as an indication that even the respondent agrees that these terms overreach and are excessive in the circumstances, but uses them to bluff consumers into thinking they have no right to complain about unfair treatment. The Director says that the respondents comment reveals that the respondent knows that the lien clauses in its contract are unfair and legally unenforceable. The Director says that I can use this comment to conclude that the respondent is prepared to unscrupulously rely upon unenforceable terms in its contract to trick consumers into thinking that they are bound by those terms.
Mr Matysik repeated his assertions of bluff in his oral submissions before me, but toned down his words in his final submissions, after having clearly realised the point being made for counsel for the Director. He then suggested that the words were used by him only in the sense that all laws were bluff, and relied upon citizens to cooperate for their efficacy. However Mr Matysik still maintained that the clauses referring to a lien were very important as a deterrent even though it was uneconomic for the respondent to enforce those terms and did not acknowledge the force of the Directors specific concerns about these terms.
An appropriately worded lien clause, as I have said, is not by reason of the creation of the lien, unfair.
However, the elements which I have referred to make these particular lien clauses unfair. Insofar as the requirements of good faith need to be taken into account in the manner suggested in Jetstar v Free, it is my view that the assertions of the respondent in its defence that he regards the clauses as bluff and his repetition of this in the material filed makes it clear that the purpose of insertion of the lien is not for a purpose consistent with the application of good standards of commercial morality or practice.
In my view the lien clauses, being clauses 10(a), 10(b) and 10(c) are each unfair terms.

[133]

The Director challenges terms 11(a), 11(b) and 11(c) of the contract which relate to the terms on which goods are to be moved.

[134]

"Movement of incorrect goods. The client shall provide an authorised representative who will be responsible for ensuring goods are loaded. Whether or not such a representative is provided, and WHETHER OR NOT the client provided the company with a LIST of ITEMS to be moved, the client shall pay all reasonable additional charges whatsoever resulting from the movement of incorrect goods or non-movement of goods that the client intended to have moved."

[135]

The Director points out that this clause applies even if the movement of incorrect goods or non-movement of goods is the fault of the respondent. Thus, it allows the respondent to avoid or limit performance of the contract and penalises the consumer but not the respondent.
The respondent says that this clause is an attempt to put the responsibility onto a supervisor on the site to make sure the right things are moved. The respondent says this is very important because at the time of pick up the goods are almost never the same as the description on the customer's list. The respondent says the clause is there to highlight that the responsibility is that of the customer .The respondent refers to the fact that the Handy Hints document deals with this issue as well by suggesting that the consumer should nominate a person to be present at the point of pick up and delivery of the goods.
Mr Matysik says that due to the nature of the business of removalists there is a difficult problem that arises with left behind goods. The respondent says this happens frequently and causes a great deal of dislocation when it occurs. The respondent says this clause is necessary to bring to the attention of the consumer the fact that if extra items are required to be moved or goods are left behind the consumer will be responsible for any extra costs.
Mr Matysik submitted that if the term did not appear in the contract the respondent would have to decide whose fault it was that goods were left and this may be a difficult task. He thus defended the approach contained in term 11(a). He suggested that there was a similar clause in the AFRA contract. The AFRA clause is, however, not identical to section 11(a) or 11(b).
In my view clause 11(a) is an unfair term because it does not make it clear that the term applies only in the event of default by the consumer. The clause gives the respondent the right to make charges of an additional nature resulting from the movement of incorrect goods or the non-movement of goods, even when the respondent may have been at fault.
As read literally, this term therefore clearly causes a significant imbalance in the parties' rights and obligations arising under the contract to the detriment of the consumer. I observe that it would not appear to be difficult to amend the clause to remove that detriment.

[136]

"If there is no-one in attendance at the place of delivery of the goods the company shall be entitled at its discretion to leave the goods at that place or to return at a later time until delivery is completed, storing the goods at any convenient place in the meantime, and the client agrees to pay any reasonable additional charges incurred thereby to the company."

[137]

In this clause, the Director complains only about the phrase 'shall be entitled at its discretion to leave the goods at that place'. She does not complain about the mechanism of storage of goods, or the charging of a reasonable amount for storage. She says that the addition of the phrase objected to allows the respondent to abandon the goods and that this is an inappropriate response which imposes an unreasonable burden on consumers.
The respondent says that it is not unreasonable to expect consumers to be home to receive delivery of the goods and that there is no alternative, if no-one is at home, to leaving the goods at the location to which they were to be delivered. Once again the respondent relies on the AFRA contract. It is interesting to note however, that the AFRA contract reproduced does not include provision for the company to leave the goods at the place nominated if there is no-one there to collect them.
Mr Matysik also relied on the suggestion in the Handy Hints document as providing notice to intending consumers that they should nominate a person to be present at the time of pickup and delivery of the goods.
The respondent challenges the applicant to identify what it is that a removalist is expected to do in a situation where a person is not available at the destination point. The respondent says there are often no local self-storage areas to use in country areas. The respondent suggests that the consequences to the respondent of failure to deliver are much more serious than those to the consumer. This is because there are costs incurred to take back the load to any appropriate point. The respondent also suggests that the clause has been inserted for a genuine reason and is not an example of bad faith.
This term creates a potentially very difficult problem if it is read in conjunction with the rest of the contract. If you read 11(b) in conjunction with 11(c) then the following are the possible consequences.
Clause 11(b) allows the respondent to leave the goods at the house or make an extra charge if no-one is at the point of destination. 11(c) provides that the time of delivery is entirely at the discretion of the company. There is no obligation under that clause on the company to notify the consumer in advance of the time of delivery or to give any reasonable notice.
Thus, the combined effect of these clauses is that the consumer has no power to require reasonable notice of when the goods are to be delivered, and no comeback if they are delivered at a time when the consumer is not there.

[138]

'The method, route and time by which carriage of goods or provision of services under this contract are performed shall be at the discretion of the company.'

[139]

The Director says that this term is unfair because it creates uncertainty for the consumer by giving the respondent the right to unilaterally vary these critical matters at any time and without notice to the consumer. Thus, there is no certainty as to what the bargain is that has been struck between the parties. The clause therefore permits the respondent but not the consumer to limit performance of the contract contrary to s32XA of the Act. It permits the respondent but not the consumer to vary the terms of the contract pursuant to s32XD of the Act and it permits the respondent to unilaterally vary the characteristics of the services to be supplied under the contract contrary to s32XG of the Act.
The respondent says that this clause is necessary as the respondent sometimes needs to take the goods via what might seem to be an unreasonable route, in order to achieve the cost savings possible when small part loads are consolidated into larger full loads. It says that it is unfair to compare its term with that of a normal removalist company, as the respondent charges much lower prices for its services precisely because it is able to use the most cost-effective routes.
The respondent says the price of its competitors is far higher because the prices are based upon a truck being at the sole service of the consumer, and with the trader allowing in its price for the risk of the truck making the return journey empty. The respondent submitted that because its services were so much cheaper the respondent wished to have leeway in transit time. If there were no such term in the contract, the respondent says there could have been debate between his staff and a disgruntled consumer as to what was a reasonable route and that the shortest route may not necessarily be the cheapest or most convenient.
The Director points out that the respondent's submission on clause 11(c) shows that the respondent sees the clause as giving him an absolute discretion and that the respondent will not hesitate to exercise that discretion in its favour and against the consumer's interests in the event of a consumer complaint.
The respondent says that the contract provided by AFRA provides for similar provisions although it provides that the removalist is to take any reasonable route. The AFRA contract does not however, give an absolute discretion to the trader as to the time at which the goods are delivered.

[140]

There are three clauses in the contract which purport to limit the respondent's liability under the contract.

[141]

'The client recognises that there are always risks involved in the movement of any goods or the provision of services under this contract, many of which are outside the company's or the client's control. All basic quoted prices are for the provision of carriage and other services whereby the client understands and accepts that there are such risks, accepts any financial detriment or other losses that may result from the performance or non-performance of such work and agrees that the company shall NOT be responsible or liable for such losses. The effect of this sub-clause may be varied where the client chooses a transit protection option (see clause 15) or where it is otherwise agreed in writing.'

[142]

The respondent says this clause is necessary because moving goods is a risky business. It is a transaction involving many people over a lengthy time span with many unknown uncontrollable variables, compared to a consumer service such as providing a gym membership, or the sale of a consumer item.
The respondent says that by using clause 14(b) he is trying to draw customers' attention to the high risks associated with transport, particularly interstate transport, of fragile goods, and to the fact that the respondent will have no control over catastrophic events which might occur such as derailment or collision.
Further, the respondent says that the inherently flimsy quality of much of the merchandise to be moved must be taken into account when assessing the fairness of this term. Merchandise is often breakable and of poor quality and is often not well packed. The respondent relied on some photos produced to support this contention.
The nature of his submissions on this term suggested that Mr Matysik wished to avoid any responsibility at all for the transport of his customers' goods. He said that many customers were asking for trouble in their failure to attend to proper packing of their goods. He asserted that many consumers might make a claim for damaged goods if they think they can get away with it, and that the respondent's staff were instructed to tell people that they shouldn't use the respondent's service if they don't want to take the risk themselves, or else they should pay for transit protection.
The respondent says that term 14(b) must be read subject to term 14(c) The respondent says the whole of the contract should be taken as context for 14(b). The whole of the contract makes it clear that the contract is subject to various consumer warranties. I note, however, that there is nothing in section 14(b) to this effect.
The respondent says AFRA has a similar mention of liability for loss and damage in its clause. There is however, no clause in the AFRA contract identical to terms 14 (b) or (c).
The Director submits that term 14(b) is unfair because it limits the respondent's liability for matters which are clearly under the respondent's control. It purports to exempt the respondent from liability for failing to perform the very work that it has contracted to do. It explicitly states that the Company shall not be responsible for losses. The wording of the term is broad enough to exempt the respondent from liability even where the loss is the fault of the respondent, or was within the control of the respondent.

[143]

'Save as expressly provided in these conditions the company shall not be liable to the client for any loss or damage suffered by the client directly or indirectly caused by -

[144]

(1) any damage, loss or destruction to goods whilst in the possession of the company, whether in transit (which includes, amongst other things, any packing, handling, installation, removal, assembly or erection) or in storage or after they have been delivered or mis-delivered;

[145]

(2) a mis-delivery, delay in pick-up or delivery, or non-delivery of goods;

[146]

(3) the carriage of goods by a route other than the shortest or usual route;

[147]

(4) any failure to collect cash on delivery (COD) on behalf of the client; and this clause shall apply whether or not any such occurrence was due to any wilful, fraudulent, negligent or other act or omission of the company.'

[148]

The Director says that clauses 14(b) and 14(c) are unfair because they are a limitation of liability in respect of acts which are specifically under the respondent's control. In particular, they absolve the respondent of liability even if loss occurs as a result of the respondent's wilful, fraudulent or negligent act or omission.
The respondent relies on the opening words to this term -"save as expressly provided in these conditions". Mr Matysik submitted that these words mean that the consequences alleged by the Director will not apply, as term 14(c) needs to be read in the context of the other provisions in the contract which protect the consumer's rights.
However, clause 14(c) is very wide. It does not expressly refer to any other term of the contract to ameliorate its effect. It purports to completely prevent any consumer claim. It even attempts to exclude liability in circumstances where the consumer suffers loss because of the wilful, fraudulent or negligent act of the respondent.
This term is in my view clearly unfair.

[149]

'The client shall INDEMNIFY the company against any action, claim, suit, fine or demand brought by any third party, the client or the contractor against the company as a result of or in connection with any breach by the client of any term of his contract, or the occurrence of any of the events listed in this clause, or clauses 10, 12 or 14 and this indemnity shall extend to the reasonable solicitor/client costs of the company in defending any action and in enforcing this indemnity.'

[150]

The Director says that this term is unfair because it confers an unreasonable benefit upon the respondent by purporting to make the consumer liable for the consequences of any proceedings against the respondent by the consumer, but also by the respondent's contractor and by any third party arising out of, or as the consequence, of any breach of the contract by the respondent, even a breach involving negligence or fraud by the respondent.
The respondent says this term assists the client by pointing out the legal responsibility of the consumer and it is only used to highlight to consumers who may not be aware that their actions may have legal consequences.
The respondent says that clause 14(f) does not do anything but restate the normal law except for the addition of solicitor/client costs. The respondent points out that provision for solicitor/client costs is also in many other contracts.
In my view this clause is unfair because of its breadth. The customer is obliged to indemnify the respondent against any breach of terms 10, 12 or 14 of the contract. These breaches may be caused by the respondent, not just the consumer.
The Director also says that the obligation in the contract to pay solicitor client costs is unfair. It is certainly unfair to require a consumer to pay the respondents solicitor client costs of defending an action brought against the respondent by a person other than the consumer.
I consider that it is also unfair for a standard form contract term to require a consumer to pay solicitor client costs. There are some circumstances in which courts and tribunals may make an award of solicitor client costs. This term presumes that those circumstances will apply in every consumer contract. It removes the consumer's right to argue as to whether solicitor client costs should apply to the particular circumstances of their individual contract. There is no equivalent term in the contract requiring the respondent to pay the consumers costs to be assessed on a solicitor client basis in the event of default by the respondent. I doubt whether a consumer would understand what the term solicitor and client costs means, or how it differs from costs which might otherwise be payable by the consumer in the event of a default.
A term requiring the payment of solicitor client costs may not be unfair if it is clearly notified to and understood by a consumer and if it is the subject of genuine and informed negotiation. This is not the case here.

[151]

The Director says that each of the terms which I have dealt with so far is unfair within the meaning of that word contained in s32W of the Fair Trading Act. The Director also argues that the backloads contract is not clearly expressed or printed in the prescribed font size, contrary to s163 of the Fair Trading Act.

[152]

Section 163(3)(b) provides that a consumer document, to the extent that it is printed or typed, must use a minimum 10 point font.
The affidavit of Sonia Barberio deals with the question of whether the respondents contract terms and conditions comply with that section.
Ms Barberio is employed by the Director as an administrative support officer. She deposes that she has experience in document production and in business software applications.
She exhibits a copy of the respondent's terms and conditions, which she has typed in 10 point font. It is clear when this document is compared to the terms and conditions in the contracts exhibited to the affidavits of Khalaf and Ghostine, which were posted to both those consumers by the respondent, that the latter documents are in a font which is smaller than 10 point font.
Mr Matysik told me that smaller than 10 point font was used only for purposes such as on correspondence to his contractors, and never in correspondence with consumers. This argument was somewhat undercut by the evidence of Ghostine and Khalaf.
Thus, the Director submits that I should find that, in breach of section 163(3)(b), the respondent has provided a written form of its contract to consumers in printing and typing that is less than 10 point font.
The Director further asserts that the respondents webpage contains the contract terms and conditions in less than 10 point font, and seeks a declaration that in so doing, the respondent is also in breach of section 163(3)(b).
Ms Barberio's evidence also goes to this issue. She gives evidence that on being shown the conditions of contract printed from the respondent's internet web page she identified the font and copied the document and pasted it into a blank Microsoft Word document using her computer skills. In doing so, she identified the size of the font created as 8.5-point font size.
It was clear from her evidence that the document which she created by using this method of downloading from the respondents internet website is significantly smaller than 10 point font.
The respondent submitted that it was not possible to ascribe a font size to a document posted on the internet. He said that the font size was created only when it was printed out, using a printer, and that a consumer could print out the contract on any font size a consumer chose.

[153]

Section 163(3)(c) of the Act provides that a consumer document must be clearly expressed. There is no assistance in the section as to what the words 'clearly expressed' mean.
As in previous cases, the Director submitted to me that the words 'clearly expressed' should be given their ordinary dictionary meaning. It was submitted that the policy behind the section was to make sure that consumer documents were in plain English and free from uncertainty, confusion and doubt. It was said that one of the reasons why this was important was expressed in the second reading speech to be the fact that Victoria had many diverse linguistic and cultural backgrounds.
The Director points out that the contract refers to an unidentified non-party who is named as 'the contractor'. Some rights and obligations are conferred in respect of the contractor under the contract without that person being identified or being a party to the contract.
Further, the Director points to the inconsistency between the granting of rights to the unnamed contractor and the retention of rights in the respondent to seize, retain, or defer or refuse delivery of goods or to sell any of the goods to recover payment.
However, the bulk of the Director's argument under s163(3)(c) was that the contract contained various inconsistent terms. Many of these inconsistencies are already relied upon by the Director as arguments as to why the terms are unfair terms. For instance, term 11(c) which gives a complete discretion to the respondent to determine the method, route and time by which the contract is performed is inconsistent with warranties implied by the Trade Practices Act and specifically referred to in term 14(a).
Similarly, term 11(c) which allows the respondent to perform the contract at its 'absolute discretion' was said to be inconsistent with the implied terms in the contract pursuant to s32JA(1) of the Fair Trading Act.
The Director also relied upon the terms which he said were likely to mislead consumers as to their rights. The Director relied upon the fact that the respondent had suggested that the contract was between the respondent, the consumer, and an unnamed assignor, as an example of the real confusion which was contained within the contract itself.

[154]

In this case the Director seeks both declarations and injunctions.
The Directors stated purpose of this litigation is to obtain declarations as to the characterization of the above terms for the benefit of consumers generally, to signal that terms such as this "tip the balance unfairly and disproportionately in favour of the trader", to use the terminology of the Ministers second reading speech, so to ensure that markets work for all consumers by protecting the consumer's real right of choice between traders.
It is also to obtain injunctive relief against this respondent, to require it to refrain from using the terms which are declared by me to be unfair.
Courts and Tribunals do not lightly exercise the power to make declarations or grant injunctions. Something more is usually required than a bare legal right. A declaration should not be made unless there is some utility in doing so.
In ACCC v Eurong Beach Resort Ltd (2005) FCA 1134, Keifel J was faced with the question of whether there was any utility in making a declaration in respect of past breaches of the Trade Practices Act in circumstances where there was little likelihood of a future breach.
In allowing the application, and making the declarations sought, she said:-

[155]

"There can be little doubt that a declaration might be obtained by a regulatory authority that particular conduct is in breach of a statutory provision, whether or not injunctive relief is appropriate. ... It has never been suggested that no power exists to grant such declaratory relief merely because the consequence of a declaration is to declare the existence of a wrong. The declaration that an offence has been committed is the concomitant of the non-existence of a right. Semantically, it may be said to be the declaration of a negative right. It is appropriate, in my view, to refer to it as a declaration of right."

[156]

An application for a declaration or injunction under Part 2B may only be brought by the Director of Consumer Affairs. It is an application for the protection of the public interest, not for the enforcement of a private right. It is an order designed to further the legislative consumer protection scheme. The Director submitted that the common law principles governing the appropriate circumstances for use of the declarative and injunctive powers of Courts and Tribunals should be considered in the light of the broader public interest considerations identified in the cases in respect of public interest proceedings.
In Alinta Asset Management v Essential Services Commission (2007) VSC 353, Hollingsworth J recognised that one of the appropriate purposes of making a declaration was so that a Court's conclusion could be "stated clearly and authoritatively, in a way which might have an educative purpose for others in the industry."
The need to consider the public policy objectives of the Act and the need to consider the protection of the public generally when considering whether or not to make a declaration or grant an injunction was also stressed by Hansen J in Cousins v Merrington (2007) VSC 542:-

[157]

"It is important not to approach the Fair Trading Act as though through the somewhat narrower eye of a private cause of action at law. The FTA is concerned with the protection of the public interest in its area of operation."

[158]

The circumstances in which declaratory and injunctive relief was appropriate in a Part 2B application were considered by Morris J in AAPT. At paragraph 26 of the judgment, His Honour said this:-

[159]

"In my opinion, an application by the Director pursuant to section 32ZC of the Fair Trading Act is an application of a public interest character. This follows, not only because the Parliament has given the power to make such an application to the Director (a public official), but also from the public policy character of the Fair Trading Act and the nature of the application itself (being to maintain proper standards and fairness in consumer contracts). The same applies in relation to an application for an injunction to prevent the continued use of unfair terms (section 32ZA) and an application that a provision of a consumer contract is not clearly expressed (section 163)."

[160]

Section 32ZA (2) provides that I may grant such an injunction if I am satisfied that it is "just and convenient" to do so, and I may grant an injunction on such terms as I consider appropriate. Section 123 also provides that I may grant an injunction if it is just and convenient to do so, and further makes it clear that the injunctive relief may be made subject to conditions, and provides other clauses of a "machinery" nature in respect of the power. Section 32ZA(3) provides that the provisions of section 123(2) to (7) of the VCAT Act applies as if an injunction issued in this proceeding were an injunction under that section.
There is no specific power given to me in the Fair Trading Act to grant a declaration. I do, however, have a general power to grant a declaration pursuant to section 124 of the VCAT Act. Section 124 provides that I may make a declaration concerning any matter in a proceeding instead of, or in addition to any order I may make in a proceeding.
In AAPT the Director had sought from the Tribunal both declarations and injunctions, notwithstanding that the conduct had ceased, but relying on the public education principles outlined in Alinta. The respondent submitted that a declaration or injunction were inappropriate remedies, as the respondent had already abandoned use of the standard form agreement containing these terms, and had adopted new terms and conditions governing the use of mobile phone contracts, which operated retrospectively, to cancel out the effect of the terms said to be unfair.
Justice Morris held that in these circumstances, the relief sought - both declaratory and injunctive-was inappropriate. He declined to make the orders sought on the ground that it was not the role of the Courts or a Tribunal to provide advisory opinions on the law. The orders to be made should determine actual disputes, and not answer abstract or hypothetical questions. In his view this principle found support from the wording of section 123 of the VCAT Act, giving the Tribunal the power to give injunctive relief - "if it is just and convenient to do so".
At Paragraph 9 of the judgment, His Honour said this:-

[161]

"In a nutshell, for declaratory or injunctive relief to be appropriate, it ought to have consequences. A traditional consequence is that a declaration or injunction might force the cessation of particular conduct. If the offending conduct has already ceased, a declaration might facilitate a claim for damages in respect of that conduct, or an injunction might deter an offender from repeating the conduct by attaching to the repetition a range of sanctions available for contempt."

[162]

In AAPT, the offending conduct had ceased. Furthermore, it was not likely to be repeated, because of the substitution of the new contracts to replace the old. In addition, the retrospective nature of the substitution meant that there would be no consumers in the marketplace whose legal rights and obligations would be governed by the offending terms.
The respondent says that there must be serious evil to be met before a declaration or injunction is appropriate and the conditions of this case do not meet that requirement.
The Director submits that this is an appropriate case for both declarative and injunctive relief. In making this submission the Director relies on the conduct of the respondent in this proceeding. He says I should be satisfied that the respondent's actions and words show that it has not taken these proceedings seriously, is prepared to misrepresent the facts, and is blind to the consumer aims of this legislation.
There are several significant issues of credit raised in the evidence before me. The Director particularly relies upon the comments of the respondent that its terms are a bluff and are used as a deterrent. She says this shows that the respondent is using unfair terms in order to intimidate consumers. The Director suggests that the respondent's attempt to qualify its earlier evidence about use of the word 'bluff' is simply not credible. I agree that Mr Matysiks language in his submissions and in presenting his case shows a concerning disregard of the rights of those consumers with whom he deals. He made various derogatory references to Marwa Khalaf and her brother "having a lend of us".
The refusal of the respondent to deal with the real issues raised by the Director in this case are of concern. In its concluding submissions, the respondent says this:

[163]

"Surely in such a competitive marketplace, what is and is not fair is for the marketplace to decide."

[164]

This submission completely disregards the lengthy submissions of the Director as to the aims of this consumer protection legislation and the many examples given by the Director of the capacity of several of the respondent's contract terms to cause significant disadvantage to the respondent's customers.
There are other examples of submissions by the respondent which appear to completely misrepresent the facts. The respondent's evidence that the contract should be viewed as a contract between the consumer and one of 7000 contractors is, in my view, not credible. The respondent's evidence about the font size of its contract conditions was not credible. Mr Matysik's assertion that it has only ever used small font size documents for commercial uses and not in its correspondence to consumers has been found to be not true on the evidence of Khalaf and Ghostine, both of whom exhibited versions of the contract in less than 10 point font posted to them by the respondent.
The respondent suggested in its written submissions that it would be calling so much evidence that the case would run for eight weeks, then failed to file any witness statements at all. Mr Matysik tried to divert the hearing into marginal issues such as the reasonableness of solicitor's costs, and complaints about a wide range of industries.
I formed the view that Mr Matysik was prepared to make any submission he thought might put off the ultimate hearing of this case, without regard to whether his submission had any factual basis.
I am particularly concerned regarding the vilification of Marwa Khalaf by the respondent in statements on its website.
As at the date of the final hearing on 1 April 2009, some four months after the Directors first protest , the statements I have outlined were still on the website, despite there having been no cross-examination at any time of Khalaf as to these issues and despite her having been recalled at the respondents request for the purpose of cross-examination.
There was never any evidence of fraudulent conduct by Khalaf placed before me. The respondent maintained its submissions about her conduct in the face of challenge and it was not until the very last morning of this hearing, 3 April 2009, that the respondent announced that the material regarding Khalaf had been removed from its website.

[165]

This is the fourth decision I have published on the scope of Part 2B of the Fair Trading Act. The (then) President of this Tribunal, Justice Morris, has also published a decision on the Part, as has a single Judge of the Supreme Court, Justice Cavanough.
I would expect, therefore, that the business community is becoming aware of the provisions of Part 2B, and is beginning to recognise that in framing its contracts, close attention must be paid to the requirements of section 32W, and in particular to the quite detailed provisions of section 32X.
The level of understanding by respondent traders of these sections has been wanting in the cases I have heard to date.
The passing of the proposed amendments to the Act which I have detailed in these reasons will, I expect, serve to strengthen the effect of Part 2B, and render it more likely that traders who use terms which contravene sections 32W or 32X will face legal action in the future.
It is therefore critical that industries in which consumer contracts are used become familiar with the principles which I have outlined in this case, and which have been expressed in the previous cases to which I have referred.

[166]

Director of Consumer Affairs Victoria v Backloads.com Pty Ltd

At a glance

Result

Key principles

Issues before the court

Plain English Summary

Cited legislation

Deep Dive

What happened

Why the court decided this way

Before and after state of the law

Key passages with plain-English translation

What fact patterns trigger this precedent

How later courts have treated it

Still-open questions

Judgment (166 paragraphs)

Director of Consumer Affairs Victoria v Backloads.com Pty Ltd (Civil Claims) [2009] VCAT 754 (11 May 2009)

Parties

Legislation Cited (2)

AI Analysis