Director of Consumer Affairs Victoria v Melbourne South Eastern Real Estate Pty Ltd

THE COURT ORDERS THAT:

1. On or before 4 pm on 22 November 2018, the parties are to make any further submissions on the proposed form of orders sent to them by the Court. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

MORTIMER J: 1 The applicant, the Director of Consumer Affairs Victoria, commenced these proceedings in May 2017 alleging the respondent, a real estate agency trading as Barry Plant Mount Waverley, had contravened provisions of the Australian Consumer Law (Schedule 2 of the Competition and Consumer Act 2010 (Cth)) and the Australian Consumer Law (Victoria) (the Australian Consumer Law as it applies in Victoria pursuant to s 8 of the Australian Consumer Law and Fair Trading Act 2012 (Vic). He alleged between certain dates in 2014 and 2015, the respondent had engaged in misleading and deceptive conduct, and had made false or misleading representations concerning the likely selling price for 20 properties at various addresses in South-East Melbourne, which the respondent advertised for sale on the website realestate.com.au. 2 The respondent, which I will identify as MSE in these reasons, has admitted to the contraventions alleged by the Director and the underlying conduct. The parties have filed both an agreed statement of facts, and the proposed orders, on a consensual basis, so as to give effect to a settlement reached between them. The parties recognised the Court must nevertheless be satisfied there is a sufficient basis to make the necessary findings, and that the orders sought (including the quantum of penalties sought) are appropriate. 3 The agreed statement of facts was admitted pursuant to s 191 of the Evidence Act 1995 (Cth), and sets out the conduct constituting the alleged contraventions of the ACL and ACL (Vic). With the Director's consent, MSE also read an affidavit of Mr Robert Nabil Namour, a director of MSE, concerning a proposed variation by MSE to the timing and rate of instalment payments of any penalties imposed by the Court, due to the financial situation of MSE. Counsel confirmed to the Court that he was instructed the altered financial position of MSE would not affect MSE's capacity to pay costs, nor to implement the compliance program it had agreed to. 4 Initially, there were also a number of affidavits "annexed" to the agreed statement of facts, upon which the Director sought to rely. The contents of these affidavits traversed much of the contents of the agreed statement of facts, and also went far beyond it. Counsel for MSE submitted that the content of those affidavits was clearly not agreed, and pointed out that the Director himself would not agree with all their content because, for example, there were affidavits from some witnesses MSE had proposed to call if the matter had not resolved by agreement. Counsel for MSE further submitted, and it was clear from even a cursory examination of the documents, that their content would not be admissible taking into account the terms and purpose of s 191(2)(b) of the Evidence Act. Counsel for the Director ultimately accepted the annexures to the agreed statement of facts should not be adduced in evidence given the settlement of the proceedings, but submitted some of them would assist the Court in understanding what was in the agreed statement of facts. 5 However, counsel accepted the Director could, and should, restrict the Director's submissions to the contents of the agreed statement of facts. That is how the case proceeded. Accordingly I have had no regard to any of the affidavit material (and documents) initially attached to the agreed statement of facts, but rather only to the agreed statement of facts itself, Mr Namour's affidavit about instalment payments, and the parties' submissions, insofar as they refer to the agreed statement of facts for factual propositions. 6 The Director's written submissions frequently went well beyond the agreed statement of facts, relying on parts of the affidavit material or documents created during the investigation process. Given the eventual agreed position of the parties at the hearing, and noting that the agreed statement of facts, and the way the proceeding was to be conducted, flowed from the parties' agreement to resolve the Director's claims in a particular way, self-evidently it is not appropriate for the Court to have regard to those parts of the Director's submissions which rely on material that ultimately was not adduced in evidence. 7 MSE consents to orders which would provide for a pecuniary penalty totalling $720,000, declarations, an adverse publicity order, a compliance program, and the payment of a contribution to the Director's costs, in a fixed lump sum amount. 8 For the reasons set out below I am broadly satisfied that the orders proposed by the parties should be made, with one specific exception to which I refer at [58]-[59]. I have proposed to make substantial changes to the content of the public notice initially proposed by the parties because in my opinion in the form proposed it did not clearly explain the findings made by the Court, in a way the public was likely to understand. I also consider that certain changes should be made to the agreed form of declarations, although none of those changes substantively affect the basis on which MSE admitted its conduct, or admitted the contraventions. The parties will be given a further opportunity to make further submissions on the proposed form of the Court's orders.