Director of Consumer Affairs Victoria v The Good Guys Discount Warehouses

Director of Consumer Affairs Victoria v The Good Guys Discount Warehouses - [2016] FCA 22 - FCA 2016 case summary — Zoe

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A. INTRODUCTION 1 In these proceedings, the Director of Consumer Affairs Victoria (the Director) alleges that the respondents, which trade under the name "The Good Guys", engaged in misleading and deceptive conduct, or conduct which was likely to mislead and deceive, in connection with the promotion of goods and extended warranties for goods for sale by the respondents. Broadly speaking, the Director's case is that the respondents' salespeople made inaccurate statements about the position the customer would be in if a product failed or was faulty after the expiry of the manufacturer's warranty, and that they failed to refer to the consumer guarantees and related remedies in the Australian Consumer Law, and so engaged in conduct that was misleading or deceptive or likely to mislead or deceive. The effect of this, it is alleged, was to exaggerate the benefits of obtaining an extended warranty and so to induce customers to purchase such a warranty. 2 The Director's case is based on five store visits, that is, visits by Consumer Affairs Victoria (CAV) inspectors to stores operated by the respondents. In issue in the proceedings were visits to the following stores: (a) Melton store; (b) Nunawading store; (c) Chadstone store in March 2013 (First Chadstone Store Visit); (d) Chadstone store in October 2013 (Second Chadstone Store Visit); and (e) Geelong store. 3 The first four store visits are the subject of proceeding No VID 507 of 2014, while the fifth store visit is the subject of proceeding No VID 508 of 2014. This reflects the fact that the Melton, Nunawading and Chadstone stores are operated by the respondent to proceeding No VID 507 of 2014, namely The Good Guys Discount Warehouses (Australia) Pty Ltd, while the Geelong store is operated by the respondent to proceeding No VID 508 of 2014, namely, Parke Muir's Pty Ltd. As noted above, both respondents trade under the name "The Good Guys" and, for the purposes of legal analysis, there is no relevant distinction between them. It will be convenient, therefore, to refer to them each (and together) as "The Good Guys". 4 On each occasion when CAV inspectors visited a store, they posed as customers interested in purchasing a television. Generally, they engaged the salesperson or staff member in a conversation about the merits of different television brands and then asked some questions about warranties. On four out of the five occasions (all except for the First Chadstone Store Visit), the CAV inspectors secretly recorded the conversation using a digital recorder. A transcript of the conversation was subsequently prepared from the audio file. In each proceeding, the respondent filed an interlocutory application seeking an order pursuant to s 138 of the Evidence Act 1995 (Cth) (Evidence Act) that the evidence of the store visits be excluded on the basis that it was obtained improperly or in contravention of an Australian law (or in consequence of an impropriety or of a contravention of an Australian law). 5 Those interlocutory applications were set down for hearing at the same time as the trial, due to the overlap of issues between the interlocutory applications and the issues to be examined at trial, and are dealt with in this judgment. Briefly, the respondents contended that the CAV inspectors acted beyond their power in entering the stores and asking questions posing as customers and secretly recording the conversations; that the evidence was obtained through trespass; and that secretly recording the conversations breached each salesperson's right to privacy in contravention of s 38 of the Charter of Human Rights and Responsibilities Act 2006 (Vic) (the Charter). The Director contended that the evidence of the store visits was not obtained improperly or in contravention of an Australian law and, in the alternative, that it should be admitted in the exercise of the discretion in s 138 of the Evidence Act. 6 The Director's misleading and deceptive conduct case is based on the conduct (statements and omissions) of the relevant salesperson or staff member during each of the store visits. The Director does not allege that The Good Guys engaged in a general practice of misleading and deceptive conduct in relation to extended warranties or consumer guarantees. 7 In summary, for the reasons that follow, I have concluded as follows: (a) In relation to the objections to evidence based on s 138 of the Evidence Act, I have concluded that the evidence should be admitted. In my view, the evidence was not obtained improperly or in contravention of an Australian law, or obtained in consequence of an impropriety or of a contravention of an Australian law, and therefore it falls outside s 138. (b) In relation to each of the five store visits, in my view The Goods Guys' conduct was not misleading or deceptive or likely to mislead or deceive. Broadly, my reasons for rejecting the Director's misleading and deceptive conduct case can be summarised as follows. Each store visit needs to be considered separately. In each case, it is necessary to consider the conversation as a whole. In several cases, the words used in the conversation (both in the questions and the answers) were vague and general, making it difficult to conclude that the statement was an inaccurate description of the position of the customer if, for example, his or her television broke down after 12 months and the customer had not purchased the extended warranty. In some cases, the focus of the discussion (both the questions and the answers) was on the practice in relation to warranties and dealing with problems rather than with rights and remedies. This makes it difficult to conclude that the failure of the salesperson or staff member to refer to the consumer guarantees and related remedies in the Australian Consumer Law was misleading or deceptive or likely to mislead or deceive. In all cases, the statements and omissions relied on by the Director formed part of a course of conduct which included The Good Guys making available in the store their extended warranty brochure. This provided a description of the consumer guarantees and related remedies in the Australian Consumer Law. In addition, there are further particular reasons for rejecting the Director's misleading and deceptive conduct case with respect to each store visit.

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B. PLEADINGS AND PROGRESS OF THE TRIAL 8 Each proceeding was commenced with a Fast Track Application. The Director's pleading at trial in each proceeding was set out in a Revised Fast Track Statement. In proceeding No VID 507 of 2014, the respondent's response was set out in a Further Amended Fast Track Response, filed with leave during the trial. In proceeding No VID 508 of 2014, the respondent's response was its Amended Fast Track Response. In each proceeding, the Director filed a Fast Track Reply. 9 In each proceeding, the Director alleged in his pleading, and the respondent admitted, that the Director is a public official whose office is established by s 107 of the Australian Consumer Law and Fair Trading Act 2012 (Vic) (the Victorian Act) and that in that capacity the Director is: (a) any other person for the purposes of s 232 of the Australian Consumer Law (Australian Consumer Law), being Sch 2 to the Competition and Consumer Act 2010 (Cth); and (b) is authorised by ss 109 and 110(1) of the Victorian Act and ss 228, 232, 246 and 247 of the Australian Consumer Law (Victoria), being the Australian Consumer Law text as applied by the Victorian Act, to bring the proceeding. As the text of the Australian Consumer Law and the Australian Consumer Law (Victoria) are the same, it is sufficient to refer hereafter to the Australian Consumer Law. 10 Further, in each proceeding, the Director alleged, and the respondent admitted, that the respondent at all material times: (a) was a corporation for the purposes of s 4 of the Competition and Consumer Act 2010 (Cth) by virtue of being a trading corporation formed within the limits of Australia; and (b) was carrying on business in Victoria and elsewhere in Australia as a retail supplier of consumer goods and services. 11 Part of the Director's case as pleaded in proceeding No VID 507 of 2014 related to interactions between The Good Guys' Melton store and a Mr and Mrs Seeger. It was alleged that the Seegers had purchased a Samsung refrigerator/freezer, that Mrs Seeger subsequently found the unit to be defective, and that The Good Guys made certain statements to Mrs Seeger and did not inform her of certain matters, which conduct was alleged to have been misleading or deceptive. The Director filed an affidavit of Mrs Seeger but was unable to make contact with her in the lead up to trial. Consequently, the Director was unable to secure her attendance at trial to give evidence and indicated that he would not pursue the case based on Mrs Seeger's affidavit. As a consequence, the respondents did not call three proposed witnesses whose evidence was responsive to the affidavit of Mrs Seeger. 12 Putting to one side, then, the case relating to Mr and Mrs Seeger, the conduct in issue in the two proceedings related to the five store visits referred to above. The format of the pleading with respect to each store visit was similar. In each case, the pleading referred to the date of the store visit, the names of the CAV inspectors who attended, the fact that they posed as potential or prospective customers seeking information in relation to buying a television, and (save in the case of the First Chadstone Store Visit) the fact (which was admitted) that the salesperson was an employee of The Good Guys and was acting in the course of his duties and speaking for and on behalf of The Good Guys. 13 The pleading (with respect to each store visit) then set out the statements alleged to have been made by the salesperson during the conversation and certain matters which, it was alleged, the salesperson did not inform or say or explain to the Director's staff. Then, in respect of each store visit, it was alleged that the conduct constituted conduct in trade or commerce which was misleading or deceptive or likely to mislead or deceive contrary to s 18 of the Australian Consumer Law. Further, it was alleged that conduct constituted a contravention of ss 29(1)(l) and (m) of the Australian Consumer Law. 14 The relief sought by the Director, as set out in the Fast Track Application in each proceeding, comprises: declarations that The Good Guys contravened the relevant provisions; injunctions; non-punitive publication orders or adverse publicity orders; pecuniary penalties; and costs. 15 Although no formal order was made to this effect, it was common ground before me that the trial was concerned only with the question of liability, and all questions concerning relief were deferred to be dealt with later, if necessary. 16 The two proceedings were tried together. As each proceeding concerned distinct store visits, no order was made that evidence in one proceeding be evidence in the other. However, the issues raised by the respondents' interlocutory applications overlapped and therefore an order was made, by consent, that the evidence in one interlocutory application be evidence in the other. 17 The Director relied on affidavits from the following witnesses: (a) Ms Tina Montero, a Senior Compliance and Enforcement Officer at CAV who attended the Melton, Nunawading and Geelong store visits; (b) Mr Hayden Bellis, a Compliance and Enforcement Officer at CAV who attended the Melton, Nunawading and Geelong store visits; (c) Ms Mindy Lim, a Compliance and Enforcement Officer at CAV, who attended the Second Chadstone Store Visit; (d) Ms Emma Bruton, a Senior Compliance and Enforcement Officer at CAV, who attended the First Chadstone Store Visit; (e) Mr John (Sam) Vines, who was at the relevant time a Compliance and Enforcement Officer at CAV and who attended the First Chadstone Store Visit; (f) Ms Kathryn Bannon, the General Manager of the Enforcement and Legal Services branch of CAV; (g) Mr Chris Vlahakis, a Compliance and Enforcement Officer at CAV, who attended the Second Chadstone Store Visit; (h) Mr Scott Gregson, the Executive General Manager, Consumer Enforcement at the Australian Competition and Consumer Commission (ACCC); (i) Mr Michael Cooper, the Director of Consumer Protection in the Office of New South Wales Fair Trading (NSW Fair Trading); (j) Mr Peter Hiland, a solicitor employed by CAV. 18 There was no cross-examination of Mr Gregson, Mr Cooper or Mr Hiland. There were objections on the grounds of relevance to some of the affidavit material, which the parties were content for me to deal with as part of this judgment. I deal with those objections in Section E below. 19 The respondents relied on affidavits from the following witnesses: (a) Mr Yasmin Yugo, who was the salesperson at the Nunawading store visit; (b) Mr Sunil Shirke, who was the salesperson at the Second Chadstone Store Visit; (c) Mr Adam Missen, the Store Manager at the Geelong store; (d) Mr Robert Gauron, the Store Manager at the Melton store; (e) Mr Travice De Silva, the Store Manager at the Chadstone store; (f) Mr Andrew Burnett, a solicitor at Clayton Utz. 20 The Director did not require Mr Missen, Mr Gauron, Mr De Silva or Mr Burnett to attend for cross-examination. There were no objections to the affidavits of these witnesses, but the Director did raise a relevance objection to a bundle of documents tendered by the respondents. I deal with that objection in Section E below.

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The consumer guarantees 23 It was alleged in the Director's pleadings, and admitted by the respondents, that goods sold by The Good Guys are subject to the following consumer guarantee and remedy provisions in the Australian Consumer Law: (a) ss 54, 55, 56 and 57; and (b) ss 259, 260, 261, 263 and 264. 24 Sections 54 to 57 fall within Division 1 of Part 3-2 of the Australian Consumer Law. That Division is headed "Consumer guarantees". Subdivision A within that Division, comprising ss 51-59, sets out guarantees relating to the supply of goods. Section 54 contains a guarantee as to acceptable quality. It provides: (1) If: (a) a person supplies, in trade or commerce, goods to a consumer; and (b) the supply does not occur by way of sale by auction; there is a guarantee that the goods are of acceptable quality. (2) Goods are of acceptable quality if they are as: (a) fit for all the purposes for which goods of that kind are commonly supplied; and (b) acceptable in appearance and finish; and (c) free from defects; and (d) safe; and (e) durable; as a reasonable consumer fully acquainted with the state and condition of the goods (including any hidden defects of the goods), would regard as acceptable having regard to the matters in subsection (3). (3) The matters for the purposes of subsection (2) are: (a) the nature of the goods; and (b) the price of the goods (if relevant); and (c) any statements made about the goods on any packaging or label on the goods; and (d) any representation made about the goods by the supplier or manufacturer of the goods; and (e) any other relevant circumstances relating to the supply of the goods. (4) If: (a) goods supplied to a consumer are not of acceptable quality; and (b) the only reason or reasons why they are not of acceptable quality were specifically drawn to the consumer's attention before the consumer agreed to the supply; the goods are taken to be of acceptable quality. (5) If: (a) goods are displayed for sale or hire; and (b) the goods would not be of acceptable quality if they were supplied to a consumer; the reason or reasons why they are not of acceptable quality are taken, for the purposes of subsection (4), to have been specifically drawn to a consumer's attention if those reasons were disclosed on a written notice that was displayed with the goods and that was transparent. (6) Goods do not fail to be of acceptable quality if: (a) the consumer to whom they are supplied causes them to become of unacceptable quality, or fails to take reasonable steps to prevent them from becoming of unacceptable quality; and (b) they are damaged by abnormal use. (7) Goods do not fail to be of acceptable quality if: (a) the consumer acquiring the goods examines them before the consumer agrees to the supply of the goods; and (b) the examination ought reasonably to have revealed that the goods were not of acceptable quality. 25 Section 55 contains a guarantee as to fitness for any disclosed purpose. Section 56 is a guarantee relating to the supply of goods by description and s 57 contains guarantees relating to the supply of goods by sample or demonstration model. 26 Sections 259-261, 263 and 264 are contained within Part 5-4 of the Australian Consumer Law, which is headed "Remedies relating to guarantees". Section 259 concerns actions against suppliers of goods and provides: (1) A consumer may take action under this section if: (a) a person (the supplier) supplies, in trade or commerce, goods to the consumer; and (b) a guarantee that applies to the supply under Subdivision A of Division 1 of Part 3 2 (other than sections 58 and 59(1)) is not complied with. (2) If the failure to comply with the guarantee can be remedied and is not a major failure: (a) the consumer may require the supplier to remedy the failure within a reasonable time; or (b) if such a requirement is made of the supplier but the supplier refuses or fails to comply with the requirement, or fails to comply with the requirement within a reasonable time - the consumer may: (i) otherwise have the failure remedied and, by action against the supplier, recover all reasonable costs incurred by the consumer in having the failure so remedied; or (ii) subject to section 262, notify the supplier that the consumer rejects the goods and of the ground or grounds for the rejection. (3) If the failure to comply with the guarantee cannot be remedied or is a major failure, the consumer may: (a) subject to section 262, notify the supplier that the consumer rejects the goods and of the ground or grounds for the rejection; or (b) by action against the supplier, recover compensation for any reduction in the value of the goods below the price paid or payable by the consumer for the goods. (4) The consumer may, by action against the supplier, recover damages for any loss or damage suffered by the consumer because of the failure to comply with the guarantee if it was reasonably foreseeable that the consumer would suffer such loss or damage as a result of such a failure. (5) Subsection (4) does not apply if the failure to comply with the guarantee occurred only because of a cause independent of human control that occurred after the goods left the control of the supplier. (6) To avoid doubt, subsection (4) applies in addition to subsections (2) and (3). (7) The consumer may take action under this section whether or not the goods are in their original packaging. 27 As can be seen, s 259 deals with a number of distinct scenarios: where the failure to comply with the guarantee can be remedied and is not a major failure; where the failure to comply with the guarantee cannot be remedied; and where the failure to comply with the guarantee is a major failure. The concept of a "major failure" is defined in s 260. Section 261 deals with how suppliers may remedy a failure to comply with a guarantee. Section 263 deals with the consequences of rejecting goods and s 264 deals with replaced goods. 28 The affidavit material filed by the Director annexes a document titled "Consumer guarantees - a guide for consumers", dated 2013, with the ACCC logo on the cover. CAV is listed as one of the contacts on the last page of the document. I set out some brief extracts from this document to indicate a way in which the content of some of the relevant consumer guarantees and remedies can be summarised for consumers. Under the heading "Consumer guarantees for goods", the document explains: The consumer guarantees are intended to ensure that you get the product you paid for and that it does what it is meant to do. There are nine guarantees that apply to goods. 29 Then, in relation to the guarantee of acceptable quality, the guide states: Acceptable quality There is a guarantee that goods are of acceptable quality if they: • are safe, durable and free from defects • are acceptable in appearance and finish • do everything that they are commonly used for. When deciding whether goods meet this guarantee, you need to consider the nature of the goods, the price, and any information provided directly by the seller or the manufacturer, or on packaging or promotional material. You should also consider how you have used the product. Goods are not expected to be indestructible - for example, if you damage the goods or use goods in an unreasonable or unintended manner, you may not be able to rely on this guarantee to obtain a remedy. Second-hand goods are also covered by the guarantee, but age, price and condition must be taken into account. The guarantee of acceptable quality still applies to imperfect goods or 'seconds'. Where a seller alerts you to any defects before the purchase, you should inspect before you buy to make sure you are still happy to go ahead. Otherwise you may not be entitled to a remedy. A consumer purchases a new pair of shoes, one of which loses a heel when it is worn for the first time. The consumer can claim that the shoe does not meet the guarantee of acceptable quality. 30 Later in the consumer guide there is a section headed "When goods or services don't meet a guarantee". This section states in part as follows: When goods or services don't meet a guarantee If a product or service you buy fails to meet a guarantee, you have a right to a remedy such as: • refund • repair • replacement or exchange • compensation • cancellation of contract. The remedy you are entitled to will depend on whether the failure to comply with the guarantee is major or minor. Minor failures Minor failures to comply with a consumer guarantee can normally be fixed or resolved in a reasonable amount of time. In this case, the seller can choose to offer you a refund, replacement or repair or, in the case of services, resupply. This must be provided free of charge and within a reasonable time depending on the circumstances. If the seller refuses to fix the problem or takes too long, you may be able to get it fixed by someone else and recover the costs from the seller. Major failures Major problems cannot be fixed or are too difficult to fix. There is a major failure to comply with a consumer guarantee when: • you would not have purchased the product if you had known about the problem. For example, you would not have bought the washing machine if you had known the motor would fail after three months. • the product is significantly different from the description, sample or demonstration model you were shown. For example, you ordered a red bicycle from a catalogue but the bicycle delivered was green. • the product is substantially unfit for its normal purpose and cannot easily be made fit within a reasonable time. For example, the raincoat you bought is not waterproof because it is made from the wrong material. • the product is substantially unfit for a purpose that you told the supplier about, and cannot easily be made fit within a reasonable time. For example, you told the seller you needed a car to tow a boat, but the car they sold you is not powerful enough to tow your boat because its engine is too small. • the product is unsafe. For example, the electric blanket has faulty wiring. … When there is a major failure with a product, you can choose to: • return the product and ask for a refund • return the product and ask for an identical replacement, or one of similar value if reasonably available • keep the product and ask for compensation for the drop in value caused by the problem. … 31 It is apparent from the sections of the Australian Consumer Law set out above that there is some complexity to these provisions and that the ability of a customer to rely on the consumer rights and related remedies will depend on a range of variables such as the nature of the goods, the price of the goods, any statements made about the goods on any packaging or label on the goods, any representations made about the goods by the supplier or manufacturer, and other relevant circumstances. In the context of a television that breaks down or is faulty more than 12 months after purchase, the price of the television, the time since purchase, and the nature of the problem are likely to be material factors in determining whether the rights are applicable and a remedy is available.

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The extended warranty 32 I turn now to the extended warranty offered by The Good Guys at the relevant time (it is no longer offered as a different product or service has been introduced). Copies of a brochure relating to the extended warranty were annexed to the affidavits of Mr Jugo and Mr Shirke. They are in the same form. The same brochure was available at all The Good Guys stores relevant to these proceedings at the times of the store visits in issue. 33 The second page of the brochure explains that The Good Guys' extended warranty is available for purchase on selected products that: (a) are purchased new from The Good Guys; (b) are manufactured for use in Australia; and (c) include a manufacturer's warranty valid in Australia at the time the customer originally purchased it. 34 After setting out the types of products in respect of which the extended warranty is available, the brochure states that extended warranty must be purchased at the same time as the customer purchases the product. 35 On the fourth and fifth pages of the brochure, the following explanations are provided: Our Extended Warranty covers most breakdowns INCLUDING many caused by general wear and tear Put simply this means that you're covered if your product wears out over time as well as for specific mechanical breakdowns. … In home servicing for larger items We'll always organise a repairer to come to your home to repair large appliances. This includes products like washing machines, fridges, TV's etc. … Automatic replacement for products under $250 Many products that cost under $250 can be time consuming to repair. All you have to do is call The Good Guys Customer Care team on 1300 368 509. … $250 food spoilage cover for each claim on refrigerators/freezers There's nothing worse than when your fridge or freezer breaks down and you lose all your food. We provide up to $250 to replace any food you might lose if your fridge or freezer breaks down. This will be paid at your request. Laundry Re-imbursement If your laundry product (washing machine or washer dryer) is out of action for more than 10 consecutive days from the time we have been notified of the failure, you will be eligible for a credit for cleaning services up to the value of $150. You will need to provide receipts for cleaning services. … No lemon Cover No lemon cover means that if the same part in a Product requires repairing more than two (2) times as a result of Mechanical or Electrical Failure, the Product will be replaced on the third visit at your request. … 36 As indicated in the above passages, The Good Guys' extended warranty provided benefits which were additional to the consumer guarantees and related remedies in the Australian Consumer Law. In closing submissions, senior counsel for the Director accepted as much. 37 On the sixth page of the brochure, there is a prominent description of the consumer guarantees in the Australian Consumer Law, which reads as follows: Knowing your rights… From 1 January 2011, all products sold through The Good Guys stores are automatically covered by the Consumer Guarantees detailed in the Australian Competition and Consumer Act 2010. This law has been designed to protect you the customer when you buy goods and services. Every time you purchase, lease or hire a good or service anywhere in Australia, you are automatically given certain rights. The law requires that your product must be free from defects and do what it's meant to do. If this is not the case, you may be entitled to a remedy. The type of remedy depends on the circumstances but may include repair or for major faults, replacement of goods or a refund. These rights are known as consumer guarantees. The availability of a remedy under the consumer guarantees however isn't specifically detailed and the right to a remedy will depend on factors such as the age type and price of the product. It's important to us that you know what your rights are. So if you would like further information about your rights and the Australian Competition and Consumer Act you can visit www.accc.gov.au 38 Next, there is a section headed "Frequently Asked Questions". The first question and answer deal with the consumer guarantees: "I've already got statutory rights so why do I need to buy an Extended Warranty?" Statutory rights are valuable and provide that if you experience a fault with your product, within a reasonable period following purchase, you're protected. However, each case is assessed individually which is great, but also means that there's no guarantee of any particular outcome each time. • There's no guarantee how long the process of assessment will take • A remedy could be a repair, replacement or a refund • You will need to be able to show that the product is defective or not doing what it's meant to do Buying an Extended Warranty offers you a level of certainty because in addition to your statutory rights, your product is protected for the amount of time you choose, after your manufacturer warranty expires. If you have a problem, a simple phone call will ensure the problem is resolved. You're not obliged to purchase an Extended Warranty we simply want to give YOU the choice. 39 The last section of the brochure sets out the detailed terms and conditions of the extended warranty offered by The Good Guys. The first part of this section explains the interaction between the rights and benefits provided by the extended warranty and the customer's rights under the Australian Consumer Law in the following terms: This document sets out the Terms and Conditions of The Good Guys Extended Warranty and clarifies the rights and benefits it provides in addition to your rights under the Australian Consumer Law. Your rights under the Australian Consumer Law The following is a summary of your rights under the Australian Consumer Law. For further information please consult the ACCC website at www.accc.gov.au. Australian Consumer Law All goods and services supplied to consumers come with guarantees that cannot be excluded under the Australian Consumer Law. You would usually be entitled to a replacement or refund for a major failure and compensation for any other reasonably foreseeable loss or damage. You are also entitled to have the goods repaired or replaced if the goods fail to be of acceptable quality and the failure does not amount to a major failure. Under the Australian Consumer Law, your rights commence and continue for a "reasonable period" from the date you purchased the Product. What is a "reasonable period" will depend upon all of the relevant circumstances, including the price, the uses to which it has been put and the nature of the Product. In addition you may also be entitled to have the Product repaired or perhaps replaced under the terms of any Manufacturer's Warranty relating to your Product. Information on the Manufacturer's Warranty is contained in the Product packaging. The benefits under your Extended Warranty are in addition to your rights and remedies under the Australian Consumer Law, any other law that applies to the goods or services that you purchase from us, and any Manufacturer's Warranty relating to your Product.

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D. THE OBJECTIONS TO EVIDENCE BASED ON SECTION 138 40 As noted above, in each proceeding, the respondent filed an interlocutory application seeking an order pursuant to s 138 of the Evidence Act that the evidence of the store visits be excluded on the basis that it was improperly or illegally obtained. Specifically, the interlocutory applications sought the exclusion of the following parts of the affidavits filed by the Director: (a) in proceeding No VID 507 of 2014: (i) Mr Bellis affirmed 13 March 2015: [8]-[15] and [19]-[38] and exhibits "HTB-1" to "HTB-3"; (ii) Ms Montero sworn 13 March 2015: [7]-[18], [22]-[29], [34]-[36] and [56] and exhibits "TMM-1" to "TMM-8"; (iii) Mr Vines sworn 13 March 2015: [9]-[25] and exhibits "JMSV-1" to "JMSV-4"; (iv) Ms Bruton sworn 13 March 2014: [10]-[24] and exhibits "ELB-4" and "ELB-5"; (v) Ms Lim sworn 18 March 2015: [7] and [12]-[21] and exhibits "ML-1" and "ML-2"; and (vi) Mr Vlahakis affirmed 18 March 2015: [8]-[16]. (b) in proceeding No VID 508 of 2014: (i) Mr Bellis affirmed 13 March 2015: [10]-[21] and exhibit "HTB-1"; and (ii) Ms Montero sworn 13 March 2015: [7]-[8] and [26]-[32] and exhibits "TMM-1" and "TMM-2". 41 The identified parts of the affidavits comprise nearly all of the Director's evidence about the store visits, including the affidavit evidence of the conversation during the First Chadstone Store Visit and the transcripts of the audio recordings of the other four store visits. 42 The interlocutory applications came on for hearing before a judge of this Court on 12 June 2015. On that occasion, the hearing of the applications needed to be adjourned because the Director's evidence was deficient in that it did not deal with the discretionary factors relevant to s 138(3). With the agreement of both sides, the interlocutory applications were listed for hearing on the same date as the trial. 43 It was common ground before me that the issues raised by the interlocutory applications should be dealt with at the same time as the other issues in the trial, and dealt with in this judgment. Thus, although the interlocutory applications are formally before the Court, I will generally refer to the issues they raise as objections to evidence based on s 138.

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Facts relevant to the objections to evidence based on s 138 44 As already mentioned, in relation to each of the five store visits, two CAV inspectors posed as customers interested in purchasing a television. There is no doubt that, in so doing, the inspectors made false representations and conveyed a false impression to the salesperson as to their interest in purchasing a television. So much was accepted by the CAV inspectors during cross-examination. Further, as mentioned above, in relation to four of the five store visits, the inspectors secretly recorded the conversation with the salesperson using a digital recorder. 45 This conduct, both posing as customers and the secret recording, was undertaken by the inspectors in accordance with instructions they received from their superior officers. In the paragraphs that follow, I set out the background facts relating to the store visits and provide more detail about the way they were conducted, for the purposes of dealing with the objections based on s 138. These facts are drawn from the affidavits filed by the parties and the oral evidence. There was little dispute about these facts. 46 In October 2012, the Compliance and Dispute Resolution Advisory Committee (CDRAC), which is a committee responsible for the national cooperation and coordination of compliance, dispute resolution and enforcement activities relating to the Australian Consumer Law and consumer issues more generally, endorsed a National Project Plan - Extended Warranties. All Australian Consumer Law regulators were involved in this national project, which was led by the Office of Fair Trading (Queensland). The objectives of the project (as set out in the National Project Plan) were: (a) To facilitate a nationally coordinated approach to reviewing [extended warranties] offered by retailers on goods and services to which the Australian Securities and Investments Commission (ASIC) Act and State and Territory Australian Consumer Laws (ACL) apply; (b) To identify areas of non-compliance with the ASIC Act and ACL; (c) To educate consumers about the protections and remedies available in the ACL and about key issues affecting decisions about whether to purchase [extended warranties]; (d) To engage with retailers who sell and provide non-compliant [extended warranties] and encourage compliance with the ASIC Act and ACL; and (e) To take (to the extent possible) coordinated, consistent enforcement action against persons who fail to take reasonable steps to comply with the ASIC Act and ACL after encouragement from ASIC and ACL regulators. 47 A copy of the National Project Plan - Extended Warranties was in evidence. One of the concerns noted in the plan was that "[r]etailers may be seeking to obfuscate their consumer guarantee obligations and represent [extended warranties] as the only way of receiving remedies in the event of a problem with the product or service". The document set out a number of other concerns with the way extended warranties were being promoted. 48 As explained by Ms Bannon, the project outlined in the National Project Plan - Extended Warranties had several identified phases, including: (a) the identification of businesses who offered extended warranties nationally; (b) the allocation of businesses to jurisdictions; and (c) engagement by each jurisdiction with allocated business. 49 A working party comprising representatives of federal and state regulators was established to further the National Project Plan. Ms Bruton participated in the bulk of the working party teleconferences from 26 November 2012. 50 During the working party teleconference on 26 November 2012, participants discussed employing 'mystery shopping' to identify any misrepresentations made by traders regarding, in particular, consumer guarantees. Ms Bruton gave evidence that she understood 'mystery shopping' as involving going into a store, acting as a consumer, and asking various questions, which would be answered by salespeople. 51 On 22 January 2013, Ms Bruton attended a further working party teleconference. During the teleconference, there was further discussion about utilising 'mystery shopping', which was relevantly recorded in the minutes as follows: Discussion on how best to capture matters regarding misrepresentations; the best approach to obtaining relevant evidence. The ACT confirmed they will engage retailers by mystery shopping but will not commence until mid-March to enable media attention concerning EWs to 'die down'. NSW suggested interviewing retail staff directly and request copies of training manuals etc. WA will engage a similar approach to the ACT. VIC wishes to firstly establish whether documentation regarding EWs exists and later engage a combination approach i.e. telephone and in-store mystery shopping etc. NT will use a similar approach to VIC. ACT confirmed they have been analysing representations online and will to [sic] follow up on these representations in-store to establish consistency. Several jurisdictions expressed their concerns regarding mystery shopping that attending one store on one day will not be representative of misrepresentations. Each jurisdiction's methods were supported and all agreed to keep the working party updated on any compliance aspects via ACLINK or the QLD team. 52 Ms Bruton accepted during cross-examination that the minutes record differing views amongst the various jurisdictions about 'mystery shopping'. However, I note that the last sentence in the passage quoted above indicates that each jurisdiction's methods were supported, and Ms Bruton in re-examination gave evidence that she noted from subsequent minutes that Western Australia, Northern Territory, Queensland and the ACT all reported that they had conducted 'mystery shopping' activities. 53 In late February or early March 2013, Ms Bruton and Mr Vines prepared an Operation Order in relation to the extended warranties national project. After setting out the objectives of the national project, the Operation Order set out the following instructions: THE MYSTERY SHOP In order to identify verbal representations that may not comply with the ACL, Consumer Affairs Victoria (CAV) officers will visit selected traders to make enquiries about extended warranties offered for specific products. Each team will consist of two people and will be allocated specific stores to visit (see Attachment A). CAV officers will enter the premises posing as prospective customers and will engage a sales assistant to make enquiries as to the application of an extended warranty on a particular product. A list of possible questions which may be used during this engagement is attached at Attachment B. Following each trader visit, CAV officers are required to fill out the checklist (see Attachment C) noting the representations made in relation to the extended warranty on offer. POWERS OF ENTRY CAV officers will not be exercising any powers of entry. Accordingly, no entry reports will be completed. This is a covert trader visit, and CAV officers will be required to wear plain clothes for this operation. 54 Sample questions were provided in the Operation Order. These were: Sample Questions Misreps on need for EW • How does the extended warranty work? • Do I need an EW? • Will I have any other protections if I don't get the EW? Misreps on existing rights / Misreps on the existence/effect of warranty • If I don't get the extended warranty and the product breaks down, what will happen? • How do they determine whether I get a refund or a repair? 55 To similar effect, in a media release issued by the Acting Director of CAV in February 2013, the Acting Director had recommended that consumers ask the following question about extended warranties: In the meantime, consumers considering an extended warranty should ask what it offers above and beyond their existing rights, and decide if it is worth the extra money. 56 It was Ms Bruton's standard practice to provide copies of documents such as the Operation Order to her manager. Her manager at the time was Mr Scott Ridout. In her evidence in cross-examination, Ms Bruton said that she did not see it as her decision to conduct the 'mystery shopping' exercises, but rather that it was part of the national project plan and an agreed position of the working party. During cross-examination, Ms Bruton accepted that she understood that the 'mystery shopping' exercises would involve deception on the part of inspectors towards the shop assistants. She said that she was comfortable with this as it seemed an effective method of obtaining verbal representations that were being made at the point of sale. No legal advice was sought as to whether the proposal to pose as customers was lawful. 57 On or about 6 March 2013, a meeting took place of CAV inspectors. Present were Ms Bruton, Ms Montero, Ms Lim and Mr Vines. During that meeting Ms Bruton directed each of the other inspectors to conduct 'mystery shopping' visits to a number of stores, including four The Good Guys stores, for the purposes of determining what statements sales staff were making about consumer guarantee rights and responsibilities under the Australian Consumer Law, and the extended warranty products sold to consumers by staff at those stores. Ms Bruton instructed the inspectors that the exercise would involve 'mystery shopping' visits where inspectors would not disclose to anyone that they were CAV inspectors; and that during these visits the inspectors were to put questions consistent with the sample questions in the Operation Order. The Operation Order required inspectors to complete a check list following the store visit. At this stage, there was no proposal or instruction to secretly record the visits with a digital recorder. Ms Bruton said during cross-examination (reflecting comments she made in an email at the time) that the purpose of the March visits was to see whether there was a problem that warranted investigation, not to collect evidence. 58 In March 2013, several 'mystery shopping' store visits took place as discussed at the meeting on or about 6 March, including to four The Good Guys stores. The First Chadstone Store Visit, which occurred on 7 March, was one of these store visits. 59 The following account of the First Chadstone Store Visit is based on the affidavits and oral evidence of Ms Bruton and Mr Vines, the CAV inspectors who conducted the store visit. I accept their evidence, as far as it goes. They did not purport to provide evidence of the precise words used during the part of the conversation set out in their affidavits, and their affidavits do not present a complete account of the conversation. (The store visit lasted 10 minutes but only a few sentences are set out in the affidavits.) The CAV inspectors did not obtain the name of the staff member and The Good Guys has been unable to identify him. Mr De Silva, who is the Store Manager of the Chadstone store and has worked there for approximately 5 years, said in his affidavit that he has not been able to ascertain the identity of the staff member, having made all reasonable enquiries. 60 Before entering the store, Ms Bruton and Mr Vines discussed the product about which they would make inquiries. They agreed to inquire about a television. On entering the store, they walked to the television area of the store. They stood close to and examined a Samsung television. 61 Shortly after, a male staff member approached them. Ms Bruton and Mr Vines (who were posing as customers) had a conversation with him to the following effect. He said: "Hi, can I help you?" Mr Vines said: "Yes, we're interested in this TV." The staff member said: "I'm not from sales. I work in admin and I saw you waiting. There's no-one around so I'll help you." (As he was from the admin area rather than sales, I will refer to him as a staff member rather than as a salesperson.) 62 The staff member, Mr Vines and Mr Bruton then had a conversation about the features of the Samsung television. Most of the questions were asked by Mr Vines rather than Ms Bruton. They discussed the features and price of the Samsung television and said words to the following effect. Mr Vines said: "What happens if it breaks down?" The staff member said: "The TV comes with a one-year manufacturer's warranty." Mr Vines said: "What happens if it breaks down after 13 months?" The staff member said: "There's nothing we can do for you unless you buy an extended warranty." Mr Vines said: "What does an extended warranty do?" The staff member said: "After 12 months with no extended warranty, we can't do anything for you. The extended warranty buys peace of mind." Mr Vines said: "We will have to think about it." 63 During the course of the conversation, neither Mr Vines nor Ms Bruton asked the following sample questions from the Operation Order: "Will I have any other protections if I don't get the extended warranty?" and "Do I need an extended warranty?". Nor did they ask what the extended warranty offered above and beyond their existing rights, as suggested in the Acting Director's media release referred to above. 64 Prior to the First Chadstone Store Visit, Ms Bruton and Mr Vines had obtained and assessed The Good Guys extended warranty brochure. 65 By letter dated 22 July 2013, Mr Vines, on behalf of CAV, wrote to The Good Guys expressing concerns about representations being made by staff in relation to extended warranties, and proposing a meeting to discuss these issues. The Good Guys responded by letter (the copy in evidence bears an incorrect date) requesting identification of the relevant stores and the nature of the representations alleged to have been made. 66 By letter dated 8 August 2013, Mr Vines responded to The Good Guys' letter. He identified the stores visited and stated that during the visits, the CAV officers did not identify themselves. The letter set out the representations which were said to have been made by sales assistants and stated that these may be misleading. The letter requested certain information from The Good Guys in order to properly address CAV's concerns. The Good Guys responded by letter (again, the copy in evidence bears an incorrect date). It is not necessary for present purposes to detail the response. It appears that The Good Guys was not prepared to provide the information requested by CAV. 67 In a memorandum dated 4 September 2013 from Mr Vines to the Strategic Directions Group of CAV, Mr Vines proposed that The Good Guys matter be escalated to the Enforcement & Legal Services branch to co-ordinate and lead 'mystery shopping' activities, with the assistance of staff from the Trader Compliance Services branch. He also proposed that the further 'mystery shopping' exercises include the use of recording devices to capture evidence of possible false or misleading representations by The Good Guys staff. 68 In early October 2013, CAV conducted further visits to The Good Guys stores to determine if the non-compliance identified in the earlier 'mystery shopping' exercise was continuing. These store visits are not in issue in the proceedings. They were not recorded using a digital recorder. 69 On 14 October 2013, at a meeting of the Enforcement Committee of CAV attended by Ms Bannon, a decision was made by the then Director of CAV, Ms Claire Noone, that CAV would re-attend The Good Guys stores and record, by a digital recording device, conversations between the CAV officers and The Good Guys staff. At the meeting, the Director said words to the effect that the audio was not for evidence but for engagement with The Good Guys. 70 On or about 14 October 2013, Ms Bannon instructed Ms Montero to conduct all further compliance assessment visits to The Good Guys stores using a hand held digital voice recorder to record all conversations without disclosing that she was a CAV inspector. Ms Montero informed Ms Bellis of this instruction the next day. Ms Montero and Mr Bellis were the CAV inspectors who conducted the Melton, Nunawading and Geelong store visits at the end of October 2013 that are in issue in the proceedings. 71 On or about 24 October 2013, a meeting took place between Ms Montero, Ms Lim and Mr Vlahakis. At this meeting, Ms Montero instructed Ms Lim and Mr Vlahakis to conduct compliance assessment visits at two The Good Guys stores. One of these was the Chadstone store. Ms Montero instructed Ms Lim and Mr Vlahakis to record their conversations with the sales staff using a hand held digital voice recorder and not to disclose to those sales staff that they were CAV inspectors. 72 During the period 25 to 30 October 2013, the Melton store visit, the Nunawading store visit, the Second Chadstone Store Visit and the Geelong store visit that are in issue in the proceedings took place. 73 On each occasion, the CAV inspectors posed as customers interested in purchasing a television and secretly recorded their conversation with the salesperson using a digital recorder. In conducting the store visits on this basis, the CAV inspectors were following instructions and (I infer) did not consider that they were acting improperly or in contravention of an Australian law. In giving the direction to conduct the 'mystery shopping' exercises, Ms Bruton did not consider this to be improper or in contravention of the law. Further, in relation to the decision to secretly record the conversations, there is no evidence to suggest that Ms Noone considered this to be improper or in contravention of the law. 74 In relation to each of these four store visits, the Director's evidence included the transcript of the audio file of the store visit. (The respondents also put into evidence the audio files themselves.) Annexed to this judgment, for ease of reference, are extracts from the transcripts of the four store visits. The extracts do not include the parts of the conversations which related to purchasing a television. The extracts include all of the parts of the conversations relied on by the Director in support of the misleading and deceptive conduct case (with the relevant paragraphs of the relevant pleading identified in the left column). Some other relevant parts of the transcript have also been included in the extracts. Where three dots appear in a row in the Annexure, this indicates that a part of the transcript has not been extracted. For the purposes of preparing this judgment I have had regard to the whole of the transcript of each store visit, not only the extracts.

[23]

Applicable principles relating to s 138 75 Section 138 of the Evidence Act provides: (1) Evidence that was obtained: (a) improperly or in contravention of an Australian law; or (b) in consequence of an impropriety or of a contravention of an Australian law; is not to be admitted unless the desirability of admitting the evidence outweighs the undesirability of admitting evidence that has been obtained in the way in which the evidence was obtained. (2) Without limiting subsection (1), evidence of an admission that was made during or in consequence of questioning, and evidence obtained in consequence of the admission, is taken to have been obtained improperly if the person conducting the questioning: (a) did, or omitted to do, an act in the course of the questioning even though he or she knew or ought reasonably to have known that the act or omission was likely to impair substantially the ability of the person being questioned to respond rationally to the questioning; or (b) made a false statement in the course of the questioning even though he or she knew or ought reasonably to have known that the statement was false and that making the false statement was likely to cause the person who was being questioned to make an admission. (3) Without limiting the matters that the court may take into account under subsection (1), it is to take into account: (a) the probative value of the evidence; and (b) the importance of the evidence in the proceeding; and (c) the nature of the relevant offence, cause of action or defence and the nature of the subject-matter of the proceeding; and (d) the gravity of the impropriety or contravention; and (e) whether the impropriety or contravention was deliberate or reckless; and (f) whether the impropriety or contravention was contrary to or inconsistent with a right of a person recognised by the International Covenant on Civil and Political Rights; and (g) whether any other proceeding (whether or not in a court) has been or is likely to be taken in relation to the impropriety or contravention; and (h) the difficulty (if any) of obtaining the evidence without impropriety or contravention of an Australian law. 76 The provision applies in both civil and criminal proceedings. It replaces the common law discretion to exclude illegally or improperly obtained evidence discussed by the High Court in Bunning v Cross (1978) 141 CLR 54 and Ridgeway v The Queen (1995) 184 CLR 19 (Ridgeway) but reflects the principles underlying that discretion. 77 Section 138(1) imposes on the court a two-staged task. At the first stage, the court is to determine whether the evidence was obtained in one of the ways identified in paragraphs (a) or (b) of the subsection. If the court concludes that the evidence was so obtained, then the court is not to admit the evidence "unless the desirability of admitting the evidence outweighs the undesirability of admitting evidence that has been obtained in the way in which the evidence was obtained". See Parker v Comptroller-General of Customs (2009) 252 ALR 619 (Parker) at [28] per French CJ; Employment Advocate v Williamson (2001) 111 FCR 20 at [78] per Branson J, Kenny J substantially agreeing at [108]. 78 Section 138(1) uses the words "improperly" and "impropriety": Those words are not defined in the Evidence Act. In Parker, French CJ said (at [29]) that the relevant ordinary meanings of "improper" include "not in accordance with truth, fact, reason or rule; abnormal, irregular; incorrect, inaccurate, erroneous, wrong". In Employment Advocate v Williamson (2001) 111 FCR 20 at [80], Branson J (Kenny J relevantly substantially agreeing) considered that the words "improper" and "impropriety" in the context of s 138 are to be understood in the sense described by Mason CJ, Deane and Dawson JJ in Ridgeway at 36-37. Their Honours there said: [T]he Bunning v Cross discretion to exclude illegally procured evidence provides, by analogy, support for the conclusion that the discretion to exclude evidence of an offence or an element of an offence procured by unlawful conduct on the part of law enforcement authorities extends to evidence of an offence or an element of an offence procured by conduct which, while not unlawful, is improper. Thus, in R v Ireland, Barwick CJ made clear that the discretion to exclude evidence on public policy grounds extended to evidence obtained by "unfair" as well as "unlawful" conduct on the part of law enforcement officers. In their judgment in Bunning v Cross, Stephen and Aickin JJ did not qualify their acceptance of Barwick CJ's judgment in Ireland by confining the discretion to a case of unlawful conduct. To the contrary, their Honours plainly accepted that the discretion extended to "unfair … conduct on the part of the authorities". Their Honours did, however, indicate a preference for the phrase "improper conduct" pointing out that "unfair" is largely meaningless when considering certain types of evidence (eg improperly obtained finger print evidence). In subsequent cases, the words "improper" and "impropriety" have been generally preferred to the words "unfair" and "unfairness" and it has been accepted as established that the Bunning v Cross discretion extends to cases of either unlawful or improper conduct on the part of the authorities. The effective investigation by the police of some types of criminal activity may necessarily involve subterfuge, deceit and the intentional creation of opportunities for the commission by a suspect of a criminal offence. When those tactics do not involve illegal conduct, their use will ordinarily be legitimate notwithstanding that they are conducive to the commission of a criminal offence by a person believed to be engaged in criminal activity. It is neither practicable nor desirable, to seek to define with precision the borderline between what is acceptable and what is improper in relation to such conduct. The most that can be said is that the stage of impropriety will be reached in the case of conduct which is not illegal only in cases involving a degree of harassment or manipulation which is clearly inconsistent with minimum standards of acceptable police conduct in all the circumstances, including, amongst other things, the nature and extent of any known or suspected existing or threatened criminal activity, the basis and justification of any suspicion, the difficulty of effective investigation or prevention and any imminent danger to the community. (emphasis added and footnotes omitted) 79 Section 138(1) refers to "contravention of an Australian law". "Australian law" is defined in the Dictionary to the Evidence Act as a law of the Commonwealth, a State or a Territory. The word "law" is defined in clause 9 of Part 2 of the Dictionary as follows: (1) A reference in this Act to a law of the Commonwealth, a State, a Territory or a foreign country is a reference to a law (whether written or unwritten) of or in force in that place. (2) A reference in this Act to an Australian law is a reference to an Australian law (whether written or unwritten) of or in force in Australia. 80 In Parker, French CJ said (at [30]) that, without essaying an exhaustive definition, the core meaning of "contravention" involves disobedience of a command expressed in a rule of law which may be statutory or non-statutory; it involves doing that which is forbidden by law or failing to do that which is required by law to be done. 81 Section 138(2) provides that in certain circumstances, evidence of an admission that was made during or in consequence of questioning is taken to have been obtained improperly. The word "admission" is relevantly defined in the Dictionary to the Evidence Act as meaning a previous representation that is: (a) made by a person who is or becomes a party to a proceeding; and (b) adverse to the person's interest in the outcome of the proceeding. 82 If the court concludes that evidence has been obtained improperly or in contravention of an Australian law, or in consequence of an impropriety or of a contravention of an Australian law, the evidence is not to be admitted unless the court is satisfied that the desirability of admitting the evidence outweighs the undesirability of admitting evidence that has been obtained in the way in which the evidence was obtained. In reaching a decision as to whether or not the court is so satisfied, the court is required to take into account each of the matters identified in paragraphs (a)-(h) of s 138(3). However, the opening words of s 138(3) make clear that the court is entitled to take into account, for the purpose of undertaking the balancing exercise required by s 138(1), additional relevant matters. 83 One of the matters referred to in s 138(3) is the probative value of the evidence. The "probative value" of evidence is defined in the Dictionary to the Evidence Act as meaning the extent to which the evidence could rationally affect the assessment of the probability of the existence of a fact in issue. 84 In Robinson v Woolworths Ltd (2005) 64 NSWLR 612 (Robinson), the NSW Court of Appeal considered the operation of the same provision of the Evidence Act 1995 (NSW) in circumstances which bear some similarity (but also some differences) to the present case. The case concerned public health legislation which created offences in relation to the supply of tobacco products to persons under 18 years of age. The Department of Health conducted a program of 'compliance testing' designed to identify those who would sell cigarettes to persons under the age of 18. Officers of the Department invited young people aged 16 years and under, with their consent and the consent of their parents, to seek to purchase cigarettes from vendors. Pursuant to this program, a young woman aged 16 went into a service station operated by the respondent and purchased a packet of cigarettes. She was accompanied by another young woman, also aged 16. The cashier who sold the cigarettes did not ask for any proof of age. Both of the young women were instructed by officers of the appellant to tell the truth at all times. They were told to tell the truth if they were asked their age, and to say that they did not have identification if they were asked for identification. At least one of the young women received a $10 voucher to spend at a shopping centre, apparently as a reward for her involvement in the compliance program. The retailers approached were selected randomly. There was no suspicion held by the appellant or any of its officers that the respondent, or the cashier who served the young woman, were in the habit of selling cigarettes to underage purchasers. 85 A judge of the District Court held that the evidence of the offence was improperly obtained because the respondent had, in a real sense, brought about the commission of the offence the subject of the prosecution. The matter came before the Court of Appeal by way of a case stated. The issue before the Court of Appeal was whether the judge was correct in holding that such conduct was "improper" for the purposes of s 138(1) of the Evidence Act 1995 (NSW). 86 All members of the Court of Appeal held that the evidence had not been improperly obtained. Separate reasons for judgment were delivered by Basten JA, with whose reasons Barr J agreed, and Hall J. 87 Justice Basten, at [16]-[20], discussed the general law discretion, focussing on Ridgeway. In paragraph [22], his Honour said that it is clear that s 138 varies the relevant common law principles in a number of respects. After noting some of the differences, Basten JA said: "On the other hand, because the Act does not define the concept of impropriety, it is difficult to perceive any necessary intention on the part of the legislature to vary the principles collected in Ridgeway, derived from earlier Australian authority. Accordingly, those principles should be applied". Basten JA then said at [23]: It follows that the identification of impropriety requires attention to the following propositions. First, it is necessary to identify what, in a particular context, may be viewed as "the minimum standards which a society such as ours should expect and require of those entrusted with powers of law enforcement". Secondly, the conduct in question must not merely blur or contravene those standards in some minor respect; it must be "quite inconsistent with" or "clearly inconsistent with" those standards. Thirdly, the concepts of "harassment" and "manipulation" suggest some level of encouragement, persuasion or importunity in relation to the commission of an offence: thus, in describing the first category of cases (at 39) the joint judgment in Ridgeway referred to offences being procured or induced. 88 In paragraph [25], Basten JA referred to the discussion of 'entrapment' in R v Sloane (1990) 49 A Crim R 270 and in the judgment of Gaudron J in Ridgeway. In Sloane, Gleeson CJ said at 272-273: The authorities relied upon in support of the application for a stay of proceedings ... establish that, whatever its precise legal effect may be, the concept of entrapment involves as a necessary element the idea that an accused person has been induced to commit a crime which he or she otherwise would not have committed or would have been unlikely to commit. … A common method of establishing that a person is carrying on an activity of selling goods of a particular kind is to buy some of the goods in question from that person. The specific sale would never have taken place but for the activity of the relevant police officer or informer, but that is not sufficient to constitute a case of entrapment. … 89 Justice Basten noted (at [27]) that Gaudron J in Ridgeway adopted a similar distinction between the mere provision of an opportunity to commit a crime and inducement to commit a crime. Gaudron J said at 77: In cases of "mere opportunity", the accused person is fairly regarded as wholly responsible for his own actions. And that is so even if there is some illegality associated with the opportunity provided, as, for example, that involved in the purchase of contraband where it is clear that it is generally available to all who wish to purchase it. But in cases which go beyond the provision of mere opportunity, where the offence results from the illegal actions of those whose duty it is to uphold the law, it is they who, in a real sense, are responsible for its commission, not the accused. In such circumstances the accused and society in general may well view prosecution as a serious injustice. 90 Justice Basten then considered a number of cases from other common law jurisdictions dealing with similar issues. He noted (at [29]) that the test identified by Lord Bingham of Cornhill CJ in Nottingham City Council v Amin [2000] 1 WLR 1071 at 1076-1077 is in terms which bear a close similarly to the language found in Ridgeway. His Lordship stated: It seems to me that the court has adopted a fairly consistent line. On the one hand it has been recognised as deeply offensive to ordinary notions of fairness if a defendant were to be convicted and punished for committing a crime which he only committed because he had been incited, instigated, persuaded, pressurised or wheedled into committing it by a law enforcement officer. On the other hand, it has been recognised that law enforcement agencies have a general duty to the public to enforce the law and it has been regarded as unobjectionable if a law enforcement officer gives a defendant an opportunity to break the law, of which the defendant freely takes advantage, in circumstances where it appears that the defendant would have behaved in the same way if the opportunity had been offered by anyone else. 91 Following the discussion of those cases, Basten JA said at [36]-[37]: [36] These principles should inform the determination of a court as to what constitutes "improperly" obtained evidence or "impropriety" for the purposes of s 138. In circumstances where there is no unlawfulness on the part of any law enforcement officer, mere doubts about the desirability or appropriateness of particular conduct will not be sufficient to demonstrate impropriety. [37] Before leaving these broad principles, it is necessary to note the indeterminacy of the test identified by reference to inconsistency with "the minimum standards which a society such as ours should expect and require of those entrusted with powers of law enforcement": Ridgeway at 36. Such a test invites assertion and counter-assertion, with no objective touchstone to assist in deciding which to accept and which to reject. It is at least doubtful whether a majority of the Australian community would have shared the High Court's view of the "entrapment" of Mr Ridgeway: see for example, the comments of McHugh J (at 85). The answer is not necessarily to eschew the task, but to establish, in advance, standards of conduct against which a claim of impropriety can be assessed. Where no relevant pre-existing standard has been breached, it should be a rare case in which impropriety would lead to exclusion. (Of course, standards may themselves require scrutiny, but no relevant standard was identified in the present case.) And the test of such a case must involve judicial appraisal of all potentially relevant public policy considerations, being the task actually undertaken in Ridgeway. Appeals to "community standards" will tend to substitute subjective reactions for careful analysis, albeit of ill-defined concepts.

[25]

Did the CAV inspectors act beyond power? 93 The respondents' first contention was that the CAV inspectors acted beyond power when they entered the stores and asked questions posing as customers and in secretly recording the conversations. It was submitted that statutory authority was necessary to do those acts, and none existed. Further or alternatively, it was contended that the scheme of the Victorian Act, in particular Part 6.4, excluded such powers by necessary implication. (It was not contended by the Director that the inspectors were exercising powers under Part 6.4, other than s 152, when they conducted the store visits.) 94 In support of the argument that statutory authority was needed, the respondents relied on the principle expressed in Aronson and Groves, Judicial Review of Administrative Action (5th ed, Lawbook Co, 2013) at [6.290]: Professor Sampford gave a concise methodological distinction between the basic attributes of public and private law. They included: There are different "closure rules" for public and private law. Such closure rules determine what should be done if there is no appropriate rule to cover a case. In public law the rule is "what is not authorised is not permitted" and in private law it is that "what is not prohibited is permitted". In accordance with public law's closure rule, there are many judicial review cases in which the ground is, quite simply, that the impugned decision-maker lacked the necessary power. Some of them turn on fine questions of statutory interpretation, whilst others are more obvious. (footnotes omitted) 95 The respondents contended that, if and to the extent that the Director relied on the powers conferred on the Director by s 110 of the Victorian Act, those powers required a delegation pursuant to s 111 and no delegation had occurred here. (It was not contended by the Director that there had been any relevant delegation pursuant to s 111.) 96 In support of the argument that the scheme of the Victorian Act, in particular Part 6.4, excludes such powers by necessary implication, the respondents drew attention to the entry and search power in s 152, which provides: An inspector may enter and inspect any part of a premises that is, at the time of the entry and inspection, open to the public. 97 The respondents contrasted that section to the corresponding section in earlier legislation, namely s 120 of the Fair Trading Act 1999 (Vic), which read: An inspector may do either or both of the following - (a) enter and inspect any part of a premises which is, at the time of the entry and inspection, open to the public; (b) purchase goods or services at such a premises at such a time and at such a price at which it is available to the public to purchase. 98 The respondents also drew attention to s 170 of the Victorian Act (also contained within Part 6.4), which deals with the privilege against self-incrimination. That section provides: (1) It is a reasonable excuse for a natural person to refuse or fail to give information or do any other thing that the person is required to do by or under this Part, if the giving of the information or the doing of that other thing would tend to incriminate the person. (2) Despite subsection (1), it is not a reasonable excuse for a natural person to refuse or fail to produce a document that the person is required to produce by or under this Part, if the production of the document would tend to incriminate the person. 99 It was submitted on behalf of the respondents that it would be incongruous, in light of s 152, which provides a power to enter premises open to the public without consent for the purposes of inspection, if a power was available to enter premises open to the public without consent for other purposes, in particular, to ask questions posing as customers and to secretly record the conversations. The respondents also submitted that it would be incongruous, in light of the preservation of the privilege against self-incrimination in s 170, if an individual could be exposed to the danger of self-incrimination through covert deception. 100 In my view, for the reasons that follow, the CAV inspectors were not acting beyond power in entering the premises and asking questions posing as customers and in secretly recording the conversations. 101 Chapter 6 of the Victorian Act deals with CAV. CAV is not established as a statutory authority or body. Section 107 of the Victorian Act provides that there is to be a Director of CAV employed under Part 3 of the Public Administration Act 2004 (Vic) and s 108 provides that there may be employed under Part 3 of that Act any other employees that are necessary for the administration of the Victorian Act. (The CAV inspectors who conducted the store visits were staff employed by the State of Victoria pursuant to this provision.) Section 109 sets out the functions of the Director. It provides in part: The Director has the following functions - … (c) to monitor compliance with this Act and the regulations and the Consumer Acts and the regulations under the Consumer Acts; … (e) to investigate breaches of this Act or the regulations or of a Consumer Act or the regulations under a Consumer Act; (f) to prosecute breaches of this Act or the regulations or of a Consumer Act or the regulations under a Consumer Act; (g) to institute and defend proceedings to achieve the purposes of this Act or the purposes of a Consumer Act; … (j) in respect of matters affecting the interests of purchasers and suppliers - (i) to investigate those matters; and (ii) to conduct research; and (iii) to collect and collate information; (k) to report to the Minister on any matter in relation to fair trading which he or she has investigated, either on his or her own motion or at the request of the Minister; (l) to educate and inform people on fair trading issues; … 102 Section 110 provides that the Director has all the powers necessary to perform his or her functions. Section 111(1) provides that, subject to subsection (2), the Director, by instrument, may delegate to any person or class of person employed under Part 3 of the Public Administration Act 2004 (Vic) in the administration of the Victorian Act, any of the Director's functions or powers under the Act, other than the power of delegation. Section 112 provides that the Director must submit an annual report on the operation of the Victorian Act to the Minister and that the Minister must cause it to be laid before Parliament. 103 Part 6.2 deals with powers of the Director. These include the power (in ss 125 and 126) to obtain information and documents compulsorily. Part 6.3 deals with codes of practice. Part 6.4 deals with inspection powers. Section 142 provides for the appointment of inspectors, s 143 with the issue of identification to each inspector. Section 144 provides that, subject to certain exceptions (one of which is the exercise of a power under s 152), an inspector must produce his or her identification for inspection before exercising a power under Part 6.4 or at any time during the exercise of a power under the Part if asked to do so. Section 145 provides a mechanism by which an inspector can obtain answers to questions, information and documents compulsorily. Sections 149-151 deal with entry and search of premises with consent. Sections 152-156 deal with entry and search of premises without consent. Sections 157-161 deal with entry and search of premises with a warrant. Sections 162-168 deal with embargo notices. Sections 169-173 deal with offences. Sections 174-181 deal with miscellaneous matters. 104 As a general proposition, the power of inquiry, of asking questions, is a power which every individual has, and what is lawful to an individual is also lawful to the Crown: Clough v Leahy (1904) 2 CLR 139 at 156-157; applied in Essendon Football Club v Chief Executive Officer of the Australian Sports Anti-Doping Authority (2014) 227 FCR 1 at [273] per Middleton J (affirmed on appeal: Hird v Chief Executive Officer of the Australian Sports Anti-Doping Authority (2015) 227 FCR 95). By application or extension of this principle, subject to contrary indication in the statutory scheme, the staff of CAV had power to ask questions while posing as customers and to record the conversations. 105 The power of the CAV inspectors to conduct the store visits may also be supported by the powers conferred on the Director by s 110 of the Victorian Act. Although these powers are expressed to be conferred on the Director, it would not be practicable for them to be exercised by him or her personally. This suggests that, notwithstanding the power of delegation, the 'Carltona principle', discussed in cases such as O'Reilly v Commissioners of the State Bank of Victoria (1983) 153 CLR 1 at 11-12 per Gibbs CJ, at 30-32 per Wilson J; and Minister for Aboriginal Affairs v Peko-Wallsend Ltd (1986) 162 CLR 24 at 37-38 per Mason J, may be applicable. 106 The question, then, is whether there is a negative implication, to be drawn from the scheme of the Victorian Act, in particular Part 6.4, that the Director and his staff do not have power to enter premises and ask questions posing as customers, or to secretly record the conversations. 107 In my view, Part 6.4 does not (and Parts 6.2 and 6.4 together do not) constitute an exhaustive statement on the powers of inspectors or CAV staff to enter premises and obtain information. Inspectors are given statutory authority to do the things set out in Part 6.4, to the extent permitted, and subject to any limitations imposed, by those provisions. In many cases, it is self-evident that statutory authority is needed to do the things set out. For example, the process for obtaining answers to questions, information and documents compulsorily in s 145 requires statutory authority. But in some cases, the statutory power is best seen as putting the existence of an otherwise available power beyond doubt. In my view, s 152 is best seen as falling into such a category, and I would not read too much into the failure of s 152 to reflect fully the predecessor provision (s 120 of the Fair Trading Act 1999 (Vic)). Section 170, which provides that it is a reasonable excuse to refuse or fail to give information or to do any other thing required by Part 6.4 if the giving of the information or the doing of that other thing would tend to incriminate the person, has a role to play when compulsory powers are invoked, but is inapt if questions are merely asked and not required to be answered. In these circumstances, it is not incongruous, as submitted by the respondents, for power to conduct the store visits in the way they were conducted to exist alongside the powers contained in Part 6.4. 108 For these reasons, I conclude that it was not beyond power for the CAV inspectors to conduct the 'mystery shopping' exercises or to secretly record the conversations.

[26]

Was the evidence obtained through trespass? 109 The respondents' second contention was that the evidence was obtained through trespass. The respondents relied on the principle expressed in Barker v The Queen (1983) 153 CLR 338 by Mason J at 346: Accordingly, these cases leave unaffected the common law principle that a person who enters premises for a purpose alien to the terms of a licence given to him to enter the premises enters as a trespasser. It is a matter of determining the scope of the authority to enter, which the licence or invitation confers. If a person enters for a purpose outside the scope of the authority then he stands in no better position than a person who enters with no authority at all. His entry is unrelated to the authority. 110 The respondents submitted that the permission given by The Good Guys to the public to enter the premises was limited by reference to purpose, the purpose being to enable bona fide members of the public to do what shoppers reasonably do when they enter into shops, namely to browse, to compare, to buy; the permission did not extend to regulators secretly recording conversations. 111 In my view, the scope of the authority to enter was not limited in the way submitted by the respondents and, accordingly, the evidence was not obtained through trespass. The Good Guys' stores were open to the public generally. It is not difficult to envisage circumstances outside those referred to by the respondents where a member of the public may legitimately enter one of The Good Guys' stores. To take a trivial example, a person may enter to shelter from the rain. 112 Further, and in any event, the circumstance that the CAV inspectors were pretending to be customers, does not take the situation outside the permission to enter. In Barker v The Queen (1994) 54 FCR 451, the Full Court of this Court considered a submission that evidence of recordings of conversations should have been excluded by the trial judge because the person who made the recordings (a Mrs Chaplin) had entered on the premises on which the conversations took place as a trespasser. Jenkinson and O'Loughlin JJ, with whom Miles J relevantly agreed, said at 472-473 that the authority Mrs Chaplin had to enter was limited to entry for the purpose of carrying on the professional relationship between herself and her adviser; and that is what she did while on the premises. They continued at 473: … The circumstances that she was merely pretending an interest in the adviser's advice and that she had the intention when she entered of recording a conversation which she would so guide that her interlocutor would, as she hoped, make admissions of his criminal conduct, do not in our opinion make her entry trespassory. 113 Jenkinson and O'Loughlin JJ set out passages from Barker v The Queen (1983) 153 CLR 338 and then referred (at 474) to Byrne v Kinematrograph Renters Society Ltd [1958] 1 WLR 762, where investigators entered a cinema theatre as persons paying for the right to view a film, but their real purpose was to count the number of patrons present in the theatre, with a view to discovering understatement of that number by the exhibitor of the film, whose obligation of payment to the distributor of the film was proportioned to the number of persons who viewed the film. In that case, the Court rejected the argument that the investigators were trespassers, holding that the cinema was open to the public who were invited to go in and take tickets, and this is what the investigators did; their motives in taking the tickets were considered to be immaterial; they did nothing they were not invited to do. Jenkinson and O'Loughlin JJ said that, like the investigators sitting in the theatre pretending to be patrons watching, or waiting to watch, the film, Mrs Chaplin was playing a role while she conversed; her licence was limited, as was theirs, to entry for the purpose which she pretended to carry out; what she said and what she heard said during the conversation were within the scope of the licence she had to enter; and the fact that she carried on the conversation for a purpose other than that which the licensor understood to be the case, did not make her entry a trespass. 114 By parity of reasoning, the CAV inspectors were not trespassers because they pretended to be customers interested in purchasing a television. Even if the scope of the permission to enter was limited to doing what shoppers do, namely browsing, comparing and buying, that is what the CAV inspectors did. It is implicit in the conclusion of the Full Court in Barker v The Queen (1994) 54 FCR 451 that the fact that the conversation was secretly recorded did not make the entry a trespass.

[27]

Did the CAV inspectors infringe the salesperson's right to privacy? 115 The respondents' third contention was that the evidence was obtained through the unlawful invasion of the salesperson's right to privacy in contravention of s 38 of the Charter. Section 38(1) of the Charter relevantly provides that, subject to the section, it is unlawful for a public authority to act in a way that is incompatible with a human right. It was not suggested that the balance of s 38 contains any relevant limitation on this obligation. The CAV inspectors who conducted the store visits fell within the definition of "public authority" in s 4(1) of the Charter. The right to privacy is set out in s 13 of the Charter, which provides: A person has the right - (a) not to have his or her privacy, family, home or correspondence unlawfully or arbitrarily interfered with; and (b) not to have his or her reputation unlawfully attacked. 116 The respondents relied on Duarte v R [1990] 1 SCR 30. In that case, in the context of considering the right under s 8 of the Canadian Charter of Rights and Freedoms to be secure against unreasonable search and seizure, La Forest J (Dickson CJC and L'Heureux-Dubé, Sopinka, Gonthier and McLachlin JJ concurring) said at 43-45: … Hunter v Southam Inc [1984] 2 SCR 145, instructs us that the primary value served by s 8 is privacy, and, as I noted in R v Dyment [1988] 2 SCR 417 at p 426 …, the spirit of s 8 must not be constrained by narrow legalistic classifications. If one is to give s 8 the purposive meaning attributed to it by Hunter v Southam Inc, one can scarcely imagine a state activity more dangerous to individual privacy than electronic surveillance and to which, in consequence, the protection accorded by s 8 should be more directly aimed … … the regulation of electronic surveillance protects us from … not the risk that someone will repeat our words, but the much more insidious danger inherent in allowing the state, in its unfettered discretion, to record and transmit our words. The reason for this protection is the realization that, if the state were free, at its sole discretion, to make permanent electronic recordings of our private communications, there would be no meaningful residuum to our right to live our lives free from surveillance. … This is not to deny that it is of vital importance that law enforcement agencies be able to employ electronic surveillance in their investigation of crime. Electronic surveillance plays an indispensable role in the detection of sophisticated criminal enterprises. Its utility in the investigation of drug related crimes, for example, has been proven time and again. But, for the reasons I have touched on, it is unacceptable in a free society that the agencies of the state be free to use this technology at their sole discretion. The threat this would pose to privacy is wholly unacceptable. 117 In my view, the secret recording of the conversations did not infringe the salesperson's right not to have his or her privacy unlawfully or arbitrarily interfered with. In the context of art 8(1) of the European Convention on Human Rights (which refers to the right to private life), the European Court of Human Rights said in Pretty v United Kingdom (2002) 35 EHRR 1 at [61]: As the Court has had previous occasion to remark, the concept of "private life" is a broad term not susceptible to exhaustive definition. It covers the physical and psychological integrity of a person. It can sometimes embrace aspects of an individual's physical and social identity. Elements such as, for example, gender identification, name and sexual orientation and sexual life fall within the personal sphere protected by Article 8. Article 8 also protects a right to personal development, and the right to establish and develop relationships with other human beings and the outside world. Though no previous case has established as such any right to self-determination as being contained in Article 8 of the Convention, the Court considers that the notion of personal autonomy is an important principle underlying the interpretation of its guarantees. (footnotes omitted) 118 In Von Hannover v Germany (2005) 40 EHHR 1, the European Court of Human Rights considered the right to private life in art 8(1) of the Convention in the context of the publication of photographs of Princess Caroline of Monaco in public places. The Court said at [50]-[51]: [50] The Court reiterates that the concept of private life extends to aspects relating to personal identity, such as a person's name, or a person's picture. Furthermore, private life, in the Court's view, includes a person's physical and psychological integrity; the guarantee afforded by Art 8 of the Convention is primarily intended to ensure the development, without outside interference, of the personality of each individual in his relations with other human beings. There is therefore a zone of interaction of a person with others, even in a public context, which may fall within the scope of "private life". [51] The Court has also indicated that, in certain circumstances, a person has a "legitimate expectation" of protection and respect for his or her private life. Accordingly, it has held in a case concerning the interception of telephone calls on business premises that the applicant "would have had a reasonable expectation of privacy for such calls". (footnotes omitted) 119 In Kӧpke v Germany (2011) 53 EHHR SE26, the applicant was employed as a shop assistant and cashier in a supermarket. The applicant's employer noticed that there were irregularities concerning the accounts in the drink department and suspected the applicant and another employee of having manipulated the accounts. The applicant's employer, with the help of a detective agency, carried out covert video surveillance for some 50 hours of the supermarket's drinks department. The camera's surveillance covered the area behind the cash desk including the till, the cashier and the area immediately surrounding the cash desk. The detective agency made a video and examined the data obtained. It drew up a report and produced several photos from the recording, which it sent to the employer together with the video. The European Court of Human Rights held (at [38]) that the applicant's "private life" within the meaning of art 8(1) was concerned by these measures. The Court said at [36]-[38]: [36] The Court reiterates that the concept of private life extends to aspects relating to personal identity, such as a person's name or picture. It may include activities of a professional or business nature and may be concerned in measures effected outside a person's home or private premises. [37] In the context of the monitoring of the actions of an individual by the use of photographic equipment, the Court has found that private-life considerations may arise concerning the recording of the data and the systematic or permanent nature of the record. It further considered relevant in this connection whether or not a particular individual was targeted by the monitoring measure and whether personal data was processed or used in a manner constituting an interference with respect for private life. A person's reasonable expectations as to privacy is a significant though not necessarily conclusive factor. [38] The Court notes that in the present case a video recording of the applicant's conduct at her workplace was made without prior notice on the instruction of her employer. The picture material obtained thereby was processed and examined by several persons working for her employer and was used in the public proceedings before the labour courts. The Court is therefore satisfied that the applicant's "private life" within the meaning of art 8(1) was concerned by these measures. (citations omitted) 120 The decision of the Supreme Court of Canada relied on by the respondents, Duarte v R [1990] 1 SCR 30 (cited in Kaba v Magistrates' Court of Victoria [2014] VSC 52 at [119] by Bell J) concerned a type of electronic surveillance referred to as 'participant surveillance'. This involved electronic surveillance in which one of the parties to a conversation, usually an undercover police officer or a police informer, surreptitiously recorded the conversation. The principal issue was whether that type of surveillance infringed the right under s 8 of the Canadian Charter to be secure against unreasonable search and seizure. Subsidiary issues were whether such infringement was justifiable under s 1 of the Charter and whether the recorded conversation could nonetheless be admitted into evidence against the accused. 121 The general legislative provisions required police officers to seek prior judicial authorisation before using electronic surveillance. Only a superior court judge could authorise electronic surveillance, and the legislative scheme set a high standard for obtaining these authorisations, including that the issuing judge was required to be satisfied that there were reasonable and probable grounds to believe that an offence had been or was being committed and that the authorisation sought would afford evidence of that offence. La Forest J (at 45-46) considered that those provisions succeeded in striking an appropriate balance; that they met the high standard of the Charter, which guaranteed the right to be secure against unreasonable search and seizure. By contrast, the legislation placed no restriction on 'participant surveillance'; the police were able to employ that practice in their absolute discretion, against whom they wished and for whatever reasons they wished, without any limit as to place or duration; there was a total absence of prior judicial supervision of the practice. La Forest J said (at 47) that there was no logic to the distinction between third-party electronic surveillance and 'participant surveillance'. 122 In the context of describing the general electronic surveillance provisions, La Forest J said at 46: … If privacy may be defined as the right of the individual to determine for himself when, how and to what extent he will release personal information about himself, a reasonable expectation of privacy would seem to demand that an individual may proceed on the assumption that the state may violate this right by recording private communications on a clandestine basis only when it has established to the satisfaction of a detached judicial officer that an offence has been or is being committed and that interception of private communications stands to afford evidence of the offence. (emphasis added) 123 In the context of discussing the absence of legislative restriction on 'participant surveillance', La Forest J said at 47: Whether the microphone is hidden in the wall or concealed on the body of a participant to the conversation, the assessment of whether the surreptitious recording trenches on a reasonable expectation of privacy must turn on whether the person whose words were recorded spoke in circumstances in which it was reasonable for that person to expect that his or her words would be heard only by the persons he or she was addressing. As I see it, where persons have reasonable grounds to believe their communications are private communications in the sense defined above, the unauthorized surreptitious electronic recording of those communications cannot fail to be perceived as an intrusion on a reasonable expectation of privacy. (emphasis in original) 124 The above cases indicate that the fact that an electronic recording is of a conversation which takes place in a work or professional environment does not exclude the potential application of the right to privacy. However, a critical consideration will be whether the recording is of a private communication; that is, a communication where it is reasonable for the speaker to expect that his or her words will only be heard by the persons he or she is addressing. In the present case, the conversations during the store visits were not private communications. They took place in a public space - the television area in a retail store - and were capable of being heard by others. Accordingly, the right to privacy of the salespeople was not infringed.

[29]

Was the evidence obtained improperly? 128 Although the respondents' submissions on s 138(1) focussed on the points discussed above, it is also appropriate to consider, more generally, whether the evidence of the store visits was obtained "improperly" by reason of the way the store visits were conducted, namely, by the CAV inspectors posing as customers and giving the false impression that they were interested in purchasing a television, and surreptitiously recording the conversations. In my view, the evidence was not improperly obtained within the meaning of s 138(1) as explained in the cases referred to above. In R v Sloane (1990) 49 A Crim R 270, Gleeson CJ said (at 272-273) that the concept of 'entrapment' involves as a necessary element the idea that an accused person has been induced to commit a crime which he or she otherwise would not have committed, or would have been unlikely to commit. In Ridgeway, Gaudron J (at 77) drew a distinction between cases of 'mere opportunity', where the accused person is fairly regarded as wholly responsible for his or her own actions, and cases which go beyond the provision of mere opportunity, where the offence results from the illegal actions of those whose duty it is to uphold the law, and it is they who, in a real sense, are responsible for its commission. Applying that reasoning in the present context, in my view the CAV inspectors gave the salesperson a mere opportunity to engage in misleading and deceptive conduct (or conduct likely to mislead or deceive). As discussed above, there is no causal relationship between, on the one hand, the false statements about being interested in purchasing a television and, on the other hand, the way in which the salesperson answered the questions concerning extended warranties and the position the customer would be in if the television broke down after 12 months. Although in several instances, the questions asked by the CAV inspectors concerning the position after 12 months were leading questions, it was open to the salesperson to reject the proposition that the CAV inspector was putting. 129 Further, taking into account the description of impropriety in Ridgeway and the discussion in Robinson set out above the evidence was not obtained improperly. In Ridgeway it was said (as detailed above) that the stage of impropriety would be reached in the case of conduct which is not illegal only in cases involving a degree of harassment or manipulation which is clearly inconsistent with minimum standards of acceptable police conduct in all the circumstances. Applying this in the present context, in my view the conduct of the CAV inspectors did not involve a degree of harassment or manipulation which was clearly inconsistent with minimum standards of acceptable conduct for such officers.

[30]

Exercise of the discretion 130 In light of the conclusions reached above, it is unnecessary for me to consider the exercise of the discretion in s 138 of the Evidence Act. However, given that the matter was the subject of evidence and submissions, I make the following observations that would have been relevant had I concluded that the evidence (or part of the evidence) was obtained improperly or in contravention of an Australian law (or in consequence of an impropriety or of a contravention of an Australian law). 131 First, I note that there are two distinct aspects of the conduct: (a) entering the store and asking questions while posing as customers; and (b) secretly recording the conversation with the salesperson. Each of these aspects needs to be considered separately in relation to the exercise of the discretion as the factors to be taken into account, or the weight to be attributed to those factors, may differ. 132 Secondly, if it were the case (contrary to the conclusions I have reached above) that the conduct of the store visit (that is, asking questions while posing as customers) was improper or in contravention of an Australian law, then there is some difficulty in considering the probative value of the evidence, because, but for that conduct, the store visit would not have happened and the facts contended for (for example, that certain statements were made) would not have occurred. On the other hand, if it were the case that the secret recording of the conversations was improper or in contravention of an Australian law, but the conduct of the store visits was not otherwise improper or in contravention of an Australian law, then the probative value of the relevant evidence would be high, as the transcripts would be strong evidence that the alleged statements were made and the alleged omissions occurred. 133 Thirdly, in relation to the importance of the evidence in the proceeding, the evidence obtained during the store visits is very important. It represents virtually all of the evidence relied on by the Director in the case. If the evidence of the store visits were excluded, the case could not be pursued. 134 Fourthly, in relation to the nature of the relevant cause of action and the nature of the subject matter of the proceeding, while the proceeding is civil rather than criminal, it includes a claim for civil penalties for breach of consumer protection legislation brought by a regulator. These matters indicate that the allegations are serious and weigh in favour of admission of the evidence. 135 Fifthly, in relation to the gravity of the impropriety or contravention, if it were concluded (contrary to my conclusions set out above) that all or part of the conduct was improper or in contravention of an Australian law, the level of gravity would depend on the basis for that conclusion. For example, if it were the case that the CAV inspectors acted beyond power or in contravention of the Charter, such conduct would have a higher level of gravity than impropriety in the general sense discussed in paragraphs [128] and [129] above. 136 Sixthly, in relation to whether the impropriety or contravention was deliberate or reckless, if it were the case (contrary to my conclusions set out above) that either aspect of the conduct was improper or in contravention of an Australian law, the conduct was not deliberate or reckless. The CAV inspectors and the relevant decision-makers did not consider the conduct to be improper or in contravention of an Australian law. Further, there is no evidence to suggest that they were reckless in the sense that they considered that it might be improper or in contravention of the law, but proceeded with indifference as to whether that was so. 137 Seventhly, in relation to whether the impropriety or contravention was contrary to or inconsistent with a right of a person recognised by the International Covenant on Civil and Political Rights, art 17(1) recognises the right to privacy, the application of which to the circumstances of this case is discussed above. 138 Eighthly, in relation to whether any other proceeding (whether or not in court) has been or is likely to be taken in relation to the impropriety or contravention, it is unlikely that any such proceeding would take place. 139 Ninthly, in relation to the difficulty (if any) of obtaining the evidence without impropriety or contravention of an Australian law, I consider that it would be very difficult to obtain the evidence relied on by the Director in this case without conducting 'mystery shopping' exercises, that is, exercises where staff of CAV pose as customers and ask questions. The case concerns alleged oral misrepresentations in a context (namely, extended warranties and consumer guarantees) where it is unlikely that consumers will complain to the regulator or be prepared to act as a witness in proceedings. This conclusion is an inference drawn from the facts set out above generally, and is supported by the evidence of Mr Gregson, Mr Cooper and Ms Bannon. The respondents objected, on grounds of relevance, to the whole of the affidavits of Mr Gregson and Mr Cooper and the relevant paragraphs of Ms Bannon's affidavits. I reject those objections on the basis that the evidence is relevant, at least, to the difficulty of obtaining the evidence without impropriety or contravention of an Australian law. In relation to the transcript evidence, I consider that it would be very difficult to obtain evidence of precisely what was said (or omitted to be said) without secretly recording the conversation.

[32]

E. OTHER OBJECTIONS TO EVIDENCE 141 As noted above, there were objections, based on relevance, to some of the evidence, which the parties were content for me to deal with in this judgment. My conclusions and reasons for those conclusions are as follows: (a) In relation to Ms Montero's affidavit dated 13 March 2015 in proceeding No VID 507 of 2014, the respondents objected to paragraphs 7-29, 34-36 and 45-59 on grounds of relevance. All of these paragraphs deal with store visits which are not in issue in the proceedings. I therefore consider these paragraphs to be irrelevant and inadmissible. (b) In relation to Ms Montero's affidavit dated 13 March 2015 in proceeding No VID 508 of 2014, objection was made to paragraphs 7-21 on grounds of relevance. These paragraphs deal with store visits which are not in issue in the proceedings. I therefore consider them to be irrelevant and inadmissible. (c) In relation to Mr Bellis's affidavit dated 13 March 2015 in proceeding No VID 507 of 2014, paragraphs 8-15, 19-20 and 26-28 were objected to on grounds of relevance. All those paragraphs relate to store visits that are not in issue in the proceedings. I therefore consider them to be irrelevant and inadmissible. (d) In relation to Ms Lim's affidavit dated 18 March 2015, paragraphs 7 and 12-13 were objected to on grounds of relevance. These paragraphs relate to store visits which are not in issue in the proceedings. I consider these paragraphs to be irrelevant and inadmissible. (e) In relation to Ms Bruton's affidavit dated 13 March 2015 in proceeding No VID 507 of 2014, objection was made on grounds of relevance to paragraphs 15-25. Paragraphs 15-20 relate to store visits which are not in issue, and I consider them irrelevant and inadmissible. However, paragraphs 21-25 deal with correspondence passing between CAV and The Good Guys which has some relevance to the objection to evidence based on s 138 of the Evidence Act. I therefore will admit those paragraphs. (f) In relation to Mr Vines's affidavit dated 13 March 2015, paragraphs 14-26 are objected to on grounds of relevance. Paragraphs 14-20 relate to store visits which are not in issue in the proceeding. I consider these to be irrelevant and inadmissible. Paragraphs 21-26 deal with correspondence passing between CAV and The Good Guys which has some relevance to the s 138 objection. I therefore will admit those paragraphs. (g) In relation to Ms Bannon's affidavits dated 7 August 2015 in each proceeding, objection is taken on grounds of relevance to paragraphs 55-59. The two affidavits are in the same form, which explains the same objections being taken to both. Paragraphs 55-59 contain observations, based on Ms Bannon's experience, about the necessity or desirability of conducting covert operations to detect oral misrepresentations to consumers. As noted above, I consider these paragraphs to be relevant, at least, to the difficulty of obtaining the evidence without impropriety or contravention of an Australian law, a factor to be taken into account in the exercise of the discretion in s 138. I therefore will admit those paragraphs. (h) In relation to Mr Vlahakis's affidavit dated 18 March 2015, objection on grounds of relevance is made to paragraphs 8-9. These relate to a store visit which is not in issue, and the paragraphs are therefore irrelevant and inadmissible. (i) In relation to Mr Gregson's affidavits dated 23 September 2015 in each proceeding, objection is made on grounds of relevance to the whole of the affidavit. Mr Gregson's affidavit deals with investigative tools adopted by the ACCC in undertaking its enforcement role, including entering premises and making enquiries of traders and purchasing goods and services from traders where the ACCC officers do not, at least in the first instance, advise traders that they are ACCC officers, referred to as 'Jo Consumer' enquiries. As noted above, I consider this evidence to be relevant, at least, to the difficulty of obtaining the evidence without impropriety or contravention of an Australian law. (j) In relation to Mr Cooper's affidavits dated 8 October 2015 in each proceeding, objection is taken to the whole of the affidavit on grounds of relevance. Mr Cooper's affidavits are similar to Mr Gregson's, but refer to the practices of NSW Fair Trading, rather than the ACCC. For the same reasons as in relation to Mr Gregson's affidavits, I will admit these affidavits. (k) In relation to Mr Hiland's affidavit dated 4 November 2015 in proceeding No VID 507 of 2014, objection is taken on the grounds of relevance to the whole affidavit. The affidavit relates to the steps taken to contact and obtain evidence from Mrs Seeger. Although that part of the case is no longer pursued, the Director seeks to rely on the statement in the last paragraph of Mr Hiland's affidavit that it is not unusual, in his experience, in litigation brought by the Director where he is not seeking relief benefiting consumers specifically, that consumers, as witnesses, have second thoughts about their participation in litigation and decline to make themselves available for cross-examination. Although I have not found it necessary to refer to this evidence in my observations about the exercise of the discretion in s 138 of the Evidence Act, I consider that paragraph to be relevant to the difficulty of obtaining the evidence without impropriety or contravention of an Australian law. I will therefore admit the affidavit. (l) In addition to their affidavit evidence, the respondents tendered a bundle of documents (comprising one lever arch folder). The Director questioned the relevance of these documents, save in relation to the matter of relief, which has been deferred. The documents in the folder include training materials. These documents may be relevant to relief but are not relevant to the issues currently before the Court. The folder also includes sample manufacturer warranty documents; extracts from "The Community" website regarding the Australian Consumer Law and extended warranties; extended warranty contract documents; extracts from The Good Guys' website; standard operating procedure documents; and warranty documents. It is not apparent how any of these documents is relevant to issues currently before the Court. No reference was made in oral closing submissions to the documents in this folder. I therefore conclude that the documents in the respondents' tender bundle are inadmissible.

[33]

Facts relevant to misleading and deceptive conduct case 142 The Director's case that The Good Guys has engaged in misleading or deceptive conduct, or conduct likely to mislead and deceive, relates to five store visits. The relevant context includes the facts and matters concerning The Good Guys' business, the consumer guarantees and the extended warranty offered by The Good Guys, set out in paragraphs [21]-[39] above. The background to and the nature of the store visits are described in paragraphs [44]-[74] above. Further details of the five store visits are as follows. It is convenient to deal with them in the order in which they are referred to in the pleadings rather than in chronological order. (a) The Melton store visit took place on 30 October 2013 and commenced at 1.16 pm. The store visit lasted approximately 15 minutes. The two CAV inspectors posing as customers were Ms Montero and Mr Bellis. The salesperson identified himself as Gary. He was not called as a witness. The Store Manager of the Melton store (Mr Gauron) in his affidavit identified the salesperson and explained that he did not want to be involved in the proceeding. Extracts from the transcript of the audio file of the store visit are set out in the Annexure. (b) The Nunawading store visit took place on 29 October 2013 and commenced at 10.40 am. The store visit lasted approximately 20 minutes. The two CAV inspectors posing as customers were again Ms Montero and Mr Bellis. The salesperson was Mr Yasmin Jugo (his name is incorrectly spelled in the transcript). He gave evidence in the trial. Extracts from the transcript of the audio file of the store visit are set out in the Annexure. (c) The First Chadstone Store Visit took place on 7 March 2013. Details of this store visit are set out in paragraphs [58]-[64] above. There is no audio file or transcript of this store visit. (d) The Second Chadstone Store Visit took place on 25 October 2013. It commenced at 2.32 pm. The audio file indicates that it lasted approximately 24 minutes. The two CAV inspectors posing as customers were Ms Lim and Mr Vlahakis. The salesperson was Mr Sunil Shirke who gave evidence in the trial. Extracts from the transcript of the audio file are set out in the Annexure. (e) The Geelong store visit took place on 30 October 2013 and commenced at 11.00 am. It lasted for approximately 14 minutes. The two CAV inspectors posing as customers were Ms Montero and Mr Bellis. The salesperson's name was Mark. The Store Manager of the Geelong store (Mr Missen) in his affidavit identified the salesperson and said that he had approached him regarding giving evidence and he did not want to get involved. Accordingly, he did not give evidence. During the course of the conversation, the salesperson wrote his name and phone number on the extended warranty brochure and handed it to Mr Bellis. Extracts from the transcript of the audio file of the store visit are set out in the Annexure. In the last passage extracted, there is a sentence which reads: "MARK: I'm sorry, (indistinct) through the (indistinct)." Mr Bellis accepted during cross-examination (having had the opportunity to listen to the relevant part of the audio file during a break) that the words spoken by Mark were: "I'm sorry, have a read through the booklet". This was a reference to the extended warranty brochure. 143 In each case, The Good Guys' extended warranty brochure was available to customers in the stores. In relation to the Melton and Nunawading store visits, the inspectors picked up the brochure during the store visit. 144 In each case, the conversation during the store visit was of a preliminary nature, in the sense that the 'customers' were not proposing to purchase a television there and then but would go away and think about it. Consequently, any decision as to whether to purchase the extended warranty would not need to be made until later, at the time of purchase of a television. 145 In each case, the CAV inspectors who conducted the store visits were conversant with the consumer guarantees and related remedies in the Australian Consumer Law. 146 The respondents put on evidence that on the main counter at the Nunawading and Chadstone stores at the relevant times there was a notice referring to refunds and returns. The notice had the ACCC logo on it and referred to the customer choosing a refund or exchange if an item had a major problem. The CAV inspectors could not recall seeing the notice in the stores. It is unclear on the evidence whether it was prominently displayed.

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Applicable principles relating to misleading and deceptive conduct 147 The Director alleges that The Good Guys contravened ss 18 and 29(1)(l) and (m) of the Australian Consumer Law. Section 18(1) provides that "[a] person must not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive". The expressions "conduct" and "engaging in conduct" are defined in s 2(2) of the Australian Consumer Law. Section 29 relevantly provides: (1) A person must not, in trade or commerce, in connection with the supply or possible supply of goods or services or in connection with the promotion by any means of the supply or use of goods or services: … (l) make a false or misleading representation concerning the need for any goods or services; or (m) make a false or misleading representation concerning the existence, exclusion or effect of any condition, warranty, guarantee, right or remedy (including a guarantee under Division 1 of Part 3-2); … 148 Section 4 of the Australian Consumer Law deals with misleading representations with respect to future matters. It provides: (1) If: (a) a person makes a representation with respect to any future matter (including the doing of, or the refusing to do, any act); and (b) the person does not have reasonable grounds for making the representation; the representation is taken, for the purposes of this Schedule, to be misleading. (2) For the purposes of applying subsection (1) in relation to a proceeding concerning a representation made with respect to a future matter by: (a) a party to the proceeding; or (b) any other person; the party or other person is taken not to have had reasonable grounds for making the representation, unless evidence is adduced to the contrary. (3) To avoid doubt, subsection (2) does not: (a) have the effect that, merely because such evidence to the contrary is adduced, the person who made the representation is taken to have had reasonable grounds for making the representation; or (b) have the effect of placing on any person an onus of proving that the person who made the representation had reasonable grounds for making the representation. (4) Subsection (1) does not limit by implication the meaning of a reference in this Schedule to: (a) a misleading representation; or (b) a representation that is misleading in a material particular; or (c) conduct that is misleading or is likely or liable to mislead; and, in particular, does not imply that a representation that a person makes with respect to any future matter is not misleading merely because the person has reasonable grounds for making the representation. 149 The principles relating to misleading and deceptive conduct have been discussed in many cases. For present purposes, it is relevant to emphasise that the conduct of a defendant must be viewed as whole. As Gibbs CJ said in Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd (1982) 149 CLR 191 at 199: It would be wrong to select some words or act, which, alone, would be likely to mislead if those words or acts, when viewed in their context, were not capable of misleading. 150 In Campbell v Backoffice Investments Pty Ltd (2009) 238 CLR 304, French CJ said at [25], "[c]haracterisation is a task that generally requires consideration of whether the impugned conduct viewed as a whole has a tendency to lead a person into error". In the same case, Gummow, Hayne, Heydon and Kiefel JJ at [102] quoted with approval the following passage from the judgment of McHugh J in Butcher v Lachlan Elder Realty Pty Ltd (2004) 218 CLR 592. In that case, in reference to s 52 of the Trade Practices Act 1974 (Cth), McHugh J said at [109]: The question whether conduct is misleading or deceptive or is likely to mislead or deceive is a question of fact. In determining whether a contravention of s 52 has occurred, the task of the court is to examine the relevant course of conduct as a whole. It is determined by reference to the alleged conduct in the light of the relevant surrounding facts and circumstances. It is an objective question that the court must determine for itself. It invites error to look at isolated parts of the corporation's conduct. The effect of any relevant statements or actions or any silence or inaction occurring in the context of a single course of conduct must be deduced from the whole course of conduct. Thus, where the alleged contravention of s 52 relates primarily to a document, the effect of the document must be examined in the context of the evidence as a whole. The court is not confined to examining the document in isolation. It must have regard to all the conduct of the corporation in relation to the document including the preparation and distribution of the document and any statement, action, silence or inaction in connection with the document. (footnotes omitted; emphasis added by Gummow, Hayne, Heydon and Kiefel JJ in Campbell at [102]) 151 Where the conduct complained of is constituted by or includes a failure to disclose something, the question is whether in light of all relevant circumstances constituted by acts, omissions, statements or silence, there has been conduct which is or is likely to be misleading or deceptive: Demagogue Pty Ltd v Ramensky (1992) 39 FCR 31 at 41 per Gummow J, Black CJ and Cooper J agreeing; Miller & Associates Insurance Broking Pty Ltd v BMW Australia Finance Ltd (2010) 241 CLR 357 at [14] per French CJ and Kiefel J. In Demagogue at 41, Gummow J agreed with the remarks of French J (as his Honour then was) in Kimberley NZI Finance Ltd v Torero Pty Ltd [1989] ATPR (Digest) 53,193 at 53,195 that, "unless the circumstances are such as to give rise to the reasonable expectation that if some relevant fact exists it would be disclosed, it is difficult to see how mere silence could support the inference that the fact does not exist". See also Miller & Associates Insurance Broking Pty Ltd v BMW Australia Finance Ltd (2010) 241 CLR 357 at [19]-[23] per French CJ and Kiefel J. 152 The task of characterisation of conduct (as misleading or deceptive) is to be distinguished from the question of causation, which may need to be determined, for example, where a private plaintiff claims damages or an injunction. In Campbell v Backoffice Investments Pty Ltd (2009) 238 CLR 304, French CJ noted at [24] that the question of characterisation as to whether conduct is misleading is logically anterior to the question whether a person has suffered loss or damage. See also Australian Competition and Consumer Commission v TPG Internet Pty Ltd (2013) 250 CLR 640 at [49] per French CJ, Crennan, Bell and Keane JJ.

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Melton store visit 153 The key elements of the Director's case in relation to this store visit are set out in paragraphs 21, 22 and 23 of the pleading in proceeding No VID 507 of 2014 which read as follows: 21. The Director contends that in these conversations statements to the following effect were made on behalf of The Good Guys: (a) The Samsung 55 inch 3D television comes with (and all other televisions come with) a 12 month warranty. A customer can extend the warranty. The Good Guys (Gary) would advise doing that because the only (key) thing that goes wrong with the 55 inch 3D Samsung television is the power source. To fix the power source would be $350 and labour to put it in would be another $250. If a customer gets the Extended Warranty product, he or she would be covered because The Good Guys' Extended Warranty also covers wear and tear. (b) If the customer has only the manufacturer's warranty and has a problem with the television the customer has to call the manufacturer and the manufacturer will come out to the customer. (c) After 12 months, if a customer does not get the Extended Warranty and gets a problem with his or her television, then he or she has a major problem. (d) Manufacturers and retailers do not provide refunds to customers anymore, they only replace faulty or defective consumer goods. (e) If a customer buys an Extended Warranty and later develops a problem with his or her television, he or she will not have to take the television anywhere - The Good Guys' related company will do it all for the customer. If they cannot fix the television, The Good Guys will replace it with a new television. 22. As part of the questions and responses regarding warranties and possible break down of a television between Gary and Mr Bellis and Ms Montero, Gary did not inform or say or explain to Mr Bellis and Ms Montero that: (a) The Good Guys, as the supplier, may, in some circumstances, have a legal obligation to provide a refund or to repair or replace a television; (b) if the television fails completely, the customer would have a choice to seek either a refund or a replacement from The Good Guys; (c) the consumer guarantee and remedies provisions in the ACL and ACL (Vic) may provide a customer with a remedy if their television breaks down either within or after 12 months of the purchase. 23. The conduct referred to in paragraphs 21 and 22 above, constitutes conduct in trade or commerce, which was misleading or deceptive or likely to mislead or deceive contrary to s 18 of the ACL and ACL (Vic) because by that conduct The Good Guys: (a) Implied that if a customer does not get The Good Guys' Extended Warranty product, he or she would not be covered if the power source develops a fault or defect whereas he or she may have a remedy or rights under the ACL and ACL (Vic). (b) Implied that without the Extended Warranty, a customer would have no remedy or rights against The Good Guys, whereas he or she may have a remedy or rights under the ACL and ACL (Vic.). (c) Imply that a customer has no recourse to The Good Guys if they develop a problem with the television and should not bother to call The Good Guys, whereas the ACL and ACL (Vic) impose obligations on suppliers as to consumer guarantees and remedies. (d) The Good Guys represented that retailers are not obliged to, provide refunds for defective consumer goods whereas in some circumstances retailers as suppliers of consumer goods are obliged to provide refunds to consumers for defective consumer goods under the consumer guarantee and remedies provisions of the ACL and ACL (Vic.). (e) Further, in the context of purporting to inform and explain to potential customers their rights in the event of a breakdown or defect in the goods offered for sale by The Good Guys, the failure to refer to the matters set out in sub-paragraphs 22(a) to 22(c) above was conduct that was likely to lead potential customers into error. (emphasis in original) 154 Paragraph 24 of the pleading alleges that The Goods Guys also contravened s 29(1)(l) and (m) of the Australian Consumer Law, and refers back to the conduct pleaded in some of the above paragraphs. It is therefore unnecessary to set out that paragraph. The same applies to the comparable paragraph of the pleading in respect of each other store visit. 155 As can be seen, paragraph 21 of the pleading alleges that the salesperson made a number of statements during the store visit. It seems that some of these statements are relied upon by the Director as being false or misleading, while others are relied upon, not as being false or misleading, but as providing a context in which there was a reasonable expectation that reference would be made to the matters set out in paragraph 22 and it was misleading or deceptive (or likely to mislead or deceive) not to do so. The same applies to the comparable paragraph of the pleading in respect of each store visit other than the First Chadstone Store Visit. 156 I start by considering whether each of the statements pleaded in paragraph 21 was made. The passage or passages of the transcript relied on by the Director in support of each pleaded statement is or are identified in the Annexure. My conclusions and reasons in respect of each of the statements alleged is as follows: (a) I accept that the statement alleged in paragraph 21(a) of the pleading was made by the salesperson in the passage relied upon by the Director. The statement picks up or paraphrases the words used. (b) There are two passages relied upon in support of the statement pleaded in paragraph 21(b). I do not accept that the pleaded statement was made. The salesperson did not use the word "only" and his statements about what to do under the manufacturer's warranty did not depend on whether the customer also had the extended warranty. Further, he did not use the words "has to call" or words to that effect. The questions and answers were concerned with who the customer typically calls as a matter of practice, not who the customer "has to" call. (c) The statement pleaded in paragraph 21(c) is evidently an attempt to paraphrase the passage relied upon. While the pleaded statement may be accepted as a summary, it loses some of the nuance and important detail of the passage. I will therefore refer to the whole of the passage relied upon in considering the conduct. (d) It is not clear from the brief exchange in the passage relied upon that the statement pleaded in paragraph 21(d) was made. (e) I accept that the statement pleaded in paragraph 21(e) was made. This was not disputed by the respondents, who contended that it was an impeccable statement. 157 Next I consider whether the salesperson failed to say or refer to each of the matters set out in paragraph 22 of the pleading: (a) I accept that the salesperson did not say that The Good Guys, as the supplier, may, in some circumstances, have a legal obligation to provide a refund or to repair or replace a television. (b) I accept that the salesperson did not say that if the television fails completely, the customer would have a choice to seek either a refund or a replacement from The Good Guys. (c) I accept that the salesperson did not say that the consumer guarantees and remedies in the Australian Consumer Law may provide a customer with a remedy if his or her television breaks down (either within or after 12 months of purchase). 158 I next consider whether the conduct of The Good Guys was misleading or deceptive (or likely to mislead or deceive) as alleged in paragraph 23 of the pleading. 159 In order to determine this question, it is necessary to have regard to the conversation as a whole, not just the pleaded statements and omissions. This applies equally to the other store visits, considered below. 160 It is also necessary to have regard to the whole of the circumstances, not just the conversation between the CAV inspectors and the salesperson. Those circumstances include the nature of the consumer guarantees and related remedies, the terms of The Good Guys' extended warranty and the fact that The Good Guys made available the extended warranty brochure in the store at the time of the store visit. For present purposes, I put to one side that the CAV inspectors were conversant with the consumer guarantees. I deal with that issue later in these reasons. The same approach will be adopted in relation to the other store visits. 161 In paragraph 23(a) of the pleading, the Director alleges that, by the relevant conduct, The Good Guys engaged in misleading and deceptive conduct by implying that if a customer did not obtain The Good Guys' extended warranty, he or she would not be covered if the power source developed a fault or defect whereas, in fact, he or she may have a remedy or rights under the Australian Consumer Law. This allegation evidently relies on the statement alleged in paragraph 21(a) of the pleading together with the omissions referred to in paragraph 22. I do not think that the salesperson impliedly represented that the customer would not be covered in this scenario if he or she did not get the extended warranty. In my view, in the passage set out in the Annexure alongside the number 21(a), the salesperson is not excluding the possibility that the customer may have a remedy in the example given (the failure of the power source); he is simply making the positive statement that the customer will be covered in that situation if he or she gets the extended warranty. In considering whether the conduct was misleading or deceptive (or likely to mislead or deceive) it is relevant to note that the availability of the consumer guarantees and remedies is dependent on the circumstances. Whether they would cover the failure of the power source would depend on a number of variables including the price of the television, when the power source failed and the nature of the failure. In this context, the extended warranty provided something extra, because it clearly provided a remedy in the example given by the salesperson, whereas the consumer guarantees and related remedies may or may not have applied. (I note for completeness, that there was no exploration in the evidence of the accuracy or otherwise of the salesperson's statement that the only thing that really goes wrong is the power source, or the quoted repair costs.) 162 In paragraph 23(b) of the pleading, the Director alleges that, by the relevant conduct, The Good Guys engaged in misleading and deceptive conduct by implying that without the extended warranty, a customer would have no remedy or rights against The Good Guys, whereas, in fact, he or she may have a remedy or rights under the Australian Consumer Law. I do not think that The Good Guys impliedly represented this. First, the statements pleaded by the Director in paragraphs 21(a) and (e), which I have accepted were made, were concerned with benefits provided by the extended warranty; the statements were not concerned with the customer's rights and remedies apart from the extended warranty. Secondly, looking at the conversation as a whole, several of the passages (both the questions and the answers) focussed on how problems are dealt with in practice, rather than rights and remedies. For example, at the beginning of the passage set out in the Annexure alongside the numbers 21(b) and (c), Mr Bellis asked "what happens…", which focussed attention on how problems are dealt with in practice. Thirdly, the words used (both in the questions and the answers) were often vague and general. For example, in the passage appearing in the Annexure alongside the numbers 21(b) and (c), Mr Bellis asked whether, "if we don't get the warranty and we've got a major problem we're in trouble". The salesperson responded, "You have got a major problem". From this remark, it is difficult to imply a representation regarding (absence of) certain rights and remedies. Further, in considering the effect of the statements and omissions relied on by the Director, it is necessary to take into account the whole course of conduct engaged in by The Good Guys, which includes making the extended warranty brochure available in the store. As set out above, the extended warranty brochure provided a description of the consumer guarantees and related remedies in the Australian Consumer Law. It is appropriate in the particular circumstances of this case to view the statements and any omissions made by the salesperson and the making available of the brochure as part of a single course of conduct because: the brochure was made available at the same time as the statements and any omissions were made; both concerned the same subject matter, namely extended warranties; and the conversation was of a preliminary nature, in the sense that the 'customers' were not proposing to purchase a television there and then but rather were going to go away and think about it, providing ample opportunity to consider the brochure before deciding whether to purchase the extended warranty. The description of the consumer guarantees and related remedies in the brochure was not merely in the 'fine print' but, as described above, was prominent. 163 In paragraph 23(c) of the pleading, the Director alleges that, by the relevant conduct, The Good Guys engaged in misleading and deceptive conduct by implying that a customer would have no recourse to The Good Guys if they developed a problem with the television and therefore should not bother to call The Good Guys, whereas the Australian Consumer Law imposes obligations on suppliers as to consumer guarantees and remedies. For substantially the same reasons as those in relation to the preceding allegation, in my view The Good Guys did not make the implication, or engage in misleading or deceptive conduct (or conduct likely to mislead or deceive) as alleged. First, to the extent that I have found that the salesperson made the statements alleged in paragraph 21 of the pleading, they do not support the implication contended for. Secondly, to the extent the Director relies on the passage appearing alongside the number 21(c) in the Annexure, it is difficult to imply from that passage a representation regarding absence of recourse to The Good Guys. Thirdly, as discussed above, it is necessary to consider the whole course of conduct engaged in by The Good Guys, which included making the extended warranty brochure available in the store. 164 In paragraph 23(d) of the pleading, the Director alleges that, by the relevant conduct, The Good Guys engaged in misleading and deceptive conduct by representing that retailers are not obliged to provide refunds for defective consumer goods, whereas in some circumstances retailers, as suppliers of consumer goods, are obliged to provide refunds to consumers for defective consumer goods under the consumer guarantees and related remedies in the Australian Consumer Law. I have concluded, above, that it is unclear whether the salesperson made the statement alleged in paragraph 21(d), which related to refunds. In these circumstances, there does not appear to be a basis to contend that The Good Guys made the representation alleged in paragraph 23(d). 165 In paragraph 23(e) of the pleading, the Director alleges that, by the relevant conduct, The Good Guys engaged in misleading and deceptive conduct because, in the context of purporting to inform and explain to potential customers their rights in the event of a breakdown or defect in the goods offered for sale by The Good Guys, the failure to refer to the matters set out in sub-paragraphs 22(a) to 22(c) of the pleading was conduct that was likely to lead potential customers into error. In my view, The Good Guys did not engage in misleading or deceptive conduct (or conduct likely to mislead or deceive) as alleged. First, I do not accept that the salesperson was purporting to inform and explain to potential customers "their rights" in the event of breakdown or defect. Much of the conversation was concerned with what happens in practice if there are problems rather than the customer's rights. Secondly, much of the conversation is couched in words which are vague and general, making it difficult to conclude that the salesperson was purporting to inform and explain to potential customers their rights. Thirdly, as discussed above, the whole course of conduct included the fact that The Good Guys made available in the store the extended warranty brochure, which described the consumer guarantee rights and remedies. 166 The Director alleges that the matters pleaded in paragraphs 23(a)-(d) were representations with respect to future matters and relies on s 4 of the Australian Consumer Law. For the reasons given above, I have concluded that the representations alleged in those paragraphs were not made. It is therefore unnecessary to determine whether the alleged representations, if made, were as to future matters. 167 For these reasons, in my view, The Good Guys did not engage in misleading and deceptive conduct as alleged in relation to the Melton store visit. For the same reasons, The Good Guys did not make false or misleading representations as alleged in paragraph 24 of the pleading.

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Nunawading store visit 168 The key elements of the Director's case in relation to this store visit are set out in paragraphs 28, 29 and 30 of the pleading which read as follows: 28. The Director contends that in these communications statements to the following effect were made on behalf of The Good Guys: (a) If the television develops a fault in the first 12 months after purchase, Samsung covers the customer. If Samsung (the manufacturer) can fix it they will, if the manufacturer cannot fix it, the manufacturer will give the customer a new television. (b) After 12 months if the television breaks down and the customer does not have the Extended Warranty, then the customer is in trouble. (c) Without an Extended Warranty for a television that costs about $2,000, a customer could take the problem to Consumer Affairs. But it can take between 3 to 9 months to get a resolution from that process and the customer would have to put up with no television for that period. (d) If Samsung cannot fix the television, they will give the customer a pro-rata amount (to take into account that the customer has used the television for some time) for the customer to put towards buying another television. (e) It is not the retailer's (The Good Guys') obligation to give refunds for a television that breaks down. (f) If the customer does not buy the Extended Warranty, The Good Guys cannot do anything because it is up to the manufacturer to give The Good Guys a credit. If the manufacturer says that they are not going to give The Good Guys a credit, then The Good Guys cannot give the customer any money back because then The Good Guys would be out-of-pocket. 29. As part of the questions and responses regarding warranties and possible break down of a television between Yasman and Mr Bellis and Ms Montero, Yasman did not inform or say or explain to Mr Bellis and Ms Montero that: (a) The Good Guys, as the supplier, may, in some circumstances, have a legal obligation to provide a refund or to repair or replace a television; (b) if the television fails completely, that the customer would have a choice to seek either a refund or a replacement from The Good Guys (or other supplier); or (c) the consumer guarantee and remedies provisions in the ACL and ACL (Vic) may provide a customer with a solution if their television breaks down either within or after 12 months of the purchase. 30. The conduct referred to in paragraphs 28 and 29 above, constitutes conduct in trade or commerce, which was misleading or deceptive or likely to mislead or deceive contrary to s 18 of the ACL and ACL (Vic) because by that conduct The Good Guys: (a) gave the false impression that if a customer buys a (Samsung) television which breaks down in the first 12 months after purchase the only recourse a customer had was against the manufacturer and that this was often difficult to pursue whereas The Good Guys as the supplier of the television may also have obligations under the consumer guarantee and remedies provisions of the ACL and ACL (Vic) and if the breakdown is a major failure to offer the customer a choice between a refund or a repair or replacement and if it is not a major failure to repair or replace the television; (b) gave the false impression that if a customer buys a Samsung television which breaks down after 12 months of the purchase the only recourse a customer had unless he or she had purchased the Extended Warranty product, was against the manufacturer and that this was often difficult to pursue whereas the customer has rights and remedies under the consumer guarantee and remedies provisions of the ACL and ACL (Vic) even if he or she does not purchase any extended warranty; (c) represented that The Good Guys as the retailer does not have any obligation to provide a refund for defective consumer goods whereas under the consumer guarantee and remedies provisions of the ACL and ACL (Vic) The Good Guys as a retailer and supplier of defective goods may in some circumstances have such an obligation; (d) represented that if a customer purchases a television, but does not purchase The Good Guys' Extended Warranty and the television breaks down 26 months after purchase, then The Good Guys cannot do anything to assist the customer because it is up to the manufacturer to give The Good Guys a credit, whereas The Good Guys, as the supplier, has obligations to the customer under the consumer guarantee and remedies provisions of the ACL and ACL (Vic) which exist during the term of any manufacturer's warranty and independently of any such manufacturer's warranty; and (e) in the context of purporting to inform and explain to potential customers the features and benefits of the products offered for sale by The Good Guys, the failure by The Good Guys to explain the matters set out in sub-paragraphs 29(a) to (c) above was conduct that was likely to lead potential customers into error. (emphasis in original) 169 I start by considering whether each of the statements pleaded in paragraph 28 was made. The passage of the transcript relied on by the Director in support of each pleaded statement is identified in the Annexure. My conclusions and reasons in respect of each of the statements alleged is as follows: (a) I accept that the salesperson made the statement alleged in paragraph 28(a), namely that if the television develops a fault in the first 12 months after purchase, Samsung "covers" the customer; if Samsung (the manufacturer) can fix it they will; if the manufacturer cannot fix it, the manufacturer will give the customer a new television. (b) I accept that the salesperson made the statement alleged in paragraph 28(b), namely that, after 12 months if the television breaks down and the customer does not have the extended warranty, then the customer is "in trouble". (c) I accept that the statement pleaded in paragraph 28(c) was made, namely that without an Extended Warranty for a television that costs about $2,000, a customer could take the problem to Consumer Affairs; but it can take between three to nine months to get a resolution from that process and the customer would have to put up with no television for that period. But I note that it is important to look at the whole of the relevant passage, including the statement that "[g]enerally you will probably get warranty on it". (d) In relation to paragraph 28(d), I accept that the pleaded statement broadly captures what the salesperson said. I take the salesperson to be giving an example of how Samsung as manufacturer would typically respond in the scenario being discussed, rather than stating what would occur in every case. (e) I do not accept that the salesperson made the statement alleged in paragraph 28(e), that is, that it is not the retailer's (The Good Guys') obligation to give refunds for a television that breaks down. In the relevant passage, Mr Bellis tells a story about an instance where Sony did not provide a refund. I think the better view is that the salesperson's statement, "[i]t's not us" is merely a statement to the effect that, in the situation described by Mr Bellis, the refund was refused by Sony rather than The Good Guys. In any event, the passage is not sufficiently clear to support a conclusion that the statement was made. (f) I accept that the salesperson made the statement alleged in paragraph 28(f), namely that if the customer does not buy the extended warranty, The Good Guys "cannot do anything" because it is up to the manufacturer to give The Good Guys a credit; if the manufacturer says that they are not going to give The Good Guys a credit, then The Good Guys cannot give the customer any money back because then The Good Guys would be out-of-pocket. 170 Next I consider whether the salesperson failed to say or refer to each of the matters set out in paragraph 29 of the pleading: (a) In relation to paragraph 29(a), I accept that the salesperson did not say that The Good Guys, as the supplier, may, in some circumstances, have a legal obligation to provide a refund or to repair or replace a television. (b) In relation to paragraph 29(b), I accept that the salesperson did not say that if the television fails completely, the customer would have a choice to seek either a refund or a replacement from The Good Guys (or other supplier). (c) In relation to paragraph 29(c), I do not accept that the salesperson did not say that the consumer guarantees and remedies in the Australian Consumer Law may provide the customer with a solution if his or her television breaks down (either within or after 12 months of purchase). In the passage which appears in the Annexure alongside the numbers 28(c) and 28(d), the salesperson stated that a customer with a $2,000 television that breaks down after 12 months could refer the matter to Consumer Affairs, and said that "[g]enerally you will probably get warranty on it". This is to be taken as a reference to statutory warranties, given that the discussion concerned a customer who had not purchased an extended warranty and a television that broke down after 12 months (that is, outside the period of the manufacturer's warranty). The consumer guarantees replaced the earlier statutory warranties. In a context such as this, involving a non-legally trained salesperson in a retail setting, I consider the references to Consumer Affairs and warranty to be sufficient to refer to the consumer guarantees. In addition, the example given by the salesperson in this passage demonstrated that the customer may well have a remedy if the television breaks down after 12 months. Further, in the next passage extracted in the Annexure (which is not one of the passages relied on by the Director) the salesperson referred expressly to there being an "implied warranty" in the context of discussing a television that costs $2,000-$3,000 and "fails" after 18 months. Again, in a context such as this, I consider the reference to an implied warranty to be sufficient to refer to the consumer guarantees. 171 I next consider whether the conduct of The Good Guys was misleading or deceptive (or likely to mislead or deceive) as alleged in paragraph 30 of the pleading. 172 In paragraph 30(a) of the pleading, the Director alleges that, by the relevant conduct, The Good Guys engaged in misleading and deceptive conduct by giving the false impression that if a customer buys a (Samsung) television which breaks down in the first 12 months after purchase the only recourse a customer had was against the manufacturer and that this was often difficult to pursue whereas The Good Guys as the supplier of the television may also have obligations under the consumer guarantee and remedies provisions of the Australian Consumer Law (and, if the breakdown is a major failure, to offer the customer a choice between a refund or a repair or replacement and, if it is not a major failure, to repair or replace the television). In my view, The Good Guys did not give the impression alleged or engage in misleading or deceptive conduct (or conduct likely to mislead or deceive) as alleged. First, the salesperson did not say that the only recourse in the first 12 months was against the manufacturer; he merely said that if the television develops a fault in the first 12 months, Samsung "covers" the customer: see the passage set out in the Annexure alongside the number 28(a). Secondly, the salesperson did not say that it was often difficult to pursue recourse against the manufacturer. To the contrary, in the same passage, the salesperson conveyed that the manufacturer would "cover you". 173 In paragraph 30(b) of the pleading, the Director alleges that, by the relevant conduct, The Good Guys engaged in misleading and deceptive conduct by giving the false impression that if a customer buys a Samsung television which breaks down after 12 months of the purchase the only recourse a customer had, unless he or she had purchased the extended warranty, was against the manufacturer, and that this was often difficult to pursue, whereas the customer has rights and remedies under the consumer guarantees and related remedies in the Australian Consumer Law even if he or she does not purchase any extended warranty. In my view, The Good Guys did not give the false impression alleged or engage in misleading or deceptive conduct (or conduct likely to mislead or deceive) as alleged. It is necessary to have regard to the whole of the conversation, not just the statements pleaded by the Director which I have accepted were made. In the passage which is set out in the Annexure alongside the numbers 28(c) and (d), the salesperson, in response to a question about a problem with the television after 12 months, said that, for a television that costs about $2,000 the customer could take it to Consumer Affairs, but it can take up to between three and nine months to get a resolution. As noted above, he said that "[g]enerally you will probably get warranty on it" but would suffer the inconvenience of "putting up" with not having a (working) television for three to nine months. There was no exploration in the evidence of whether three to nine months was a realistic time frame to deal with a claim relating to a broken television in such a scenario. In this passage, the salesperson correctly indicated that the customer had rights and remedies available if the television broke down after the first 12 months and the customer had not purchased the extended warranty. The point he was making concerned the time it may take to resolve a claim based on such rights and remedies, rather than the identity of the person responsible (ie, the manufacturer or the supplier). It is true that, in a later passage, set out in the Annexure alongside the number 28(f), the salesperson said that if the customer did not buy the extended warranty, The Good Guys could not do anything because it is up to the manufacturer to give The Good Guys a credit. That was incorrect. The Good Guys may be obliged, depending on the circumstances, to repair or replace the product or refund the purchase price, pursuant to the consumer guarantees and related remedies in the Australian Consumer Law. But that statement immediately followed a description of particular benefits available under the extended warranty and, in that context, may have been intended to convey that those benefits would not have been available if the customer did not purchase the extended warranty. In any event, I think the inaccuracy was sufficiently countered by the references elsewhere in the conversation to taking the matter to Consumer Affairs and to there being an "implied warranty". These statements conveyed that the customer did have rights and remedies available even if he or she did not purchase the extended warranty. While he did not identify The Good Guys as potentially liable, I think the salesperson sufficiently drew attention to the existence of the rights and remedies. Further, in considering the effect of the statements and omissions relied on by the Director, it is necessary to take into account the fact that The Good Guys made the extended warranty brochure available in the store. As with the store visit discussed above, in my view this formed part of a single course of conduct by The Good Guys. As set out above, the extended warranty brochure provided a description of the consumer guarantees and related remedies. 174 In paragraph 30(c) of the pleading, the Director alleges that, by the relevant conduct, The Good Guys engaged in misleading and deceptive conduct by representing that The Good Guys as the retailer does not have any obligation to provide a refund for defective consumer goods, whereas under the consumer guarantees and related remedies in the Australian Consumer Law The Good Guys as a supplier of defective goods may in some circumstances have such an obligation. This allegation appears to be founded on the statement alleged in paragraph 28(e) of the pleading having been made. I have found, above, that that statement was not made. If the allegation is premised on any of the other statements alleged in paragraph 28 of the pleading which I have found were made, the conduct of The Good Guys needs to be considered as a whole. This includes making the extended warranty brochure available in the store. Taking this into account, in my view the alleged representation was not made. It follows that this allegation is not made out. 175 In paragraph 30(d) of the pleading, the Director alleges that, by the relevant conduct, The Good Guys engaged in misleading and deceptive conduct by representing that if a customer purchases a television, but does not purchase The Good Guys' extended warranty and the television breaks down 26 months after purchase, then The Good Guys cannot do anything to assist the customer because it is up to the manufacturer to give The Good Guys a credit, whereas The Good Guys, as the supplier, has obligations to the customer under the consumer guarantees and related remedies in the Australian Consumer Law which exist during the term of any manufacturer's warranty and independently of any such manufacturer's warranty. I do not think that The Good Guys made the representation or engaged in misleading or deceptive conduct (or conduct likely to mislead or deceive) as alleged. I accept that the salesperson made the statement alleged in paragraph 28(f) and that this was incorrect. But that statement needs to be considered in light of the immediately preceding passage in which the salesperson had described some specific benefits available under the extended warranty. As discussed above, the salesperson may have been intending to convey that the customer would not have those specific benefits if he or she did not purchase the extended warranty. In any event, taking into account the parts of the conversation in which the salesperson referred to Consumer Affairs and there being an implied warranty, and the fact that The Good Guys made available in the store the extended warranty brochure, in my view the alleged representation was not made and the conduct was not misleading or deceptive or likely to mislead or deceive. 176 In paragraph 30(e) of the pleading, the Director alleges that, by the relevant conduct, The Good Guys engaged in misleading and deceptive conduct because, in the context of purporting to inform and explain to potential customers the features and benefits of the products offered for sale by The Good Guys, the failure by The Good Guys to explain the matters set out in paragraphs 29(a) to (c) of the pleading was conduct that was likely to lead potential customers into error. In my view, The Good Guys did not engage in misleading or deceptive conduct (or conduct likely to mislead or deceive) as alleged. First, as discussed above, I do not accept that the salesperson failed to say or refer to the matters set out in paragraph 29(c) of the pleading. Secondly, as discussed above, it is necessary to take into account the fact that The Good Guys made available in the store the extended warranty brochure, which described the consumer guarantees and related remedies in the Australian Consumer Law. 177 The Director further alleges that the matters pleaded in paragraphs 30(a)-(d) were representations with respect to future matters and relies on s 4 of the Australian Consumer Law. For the reasons given above, I have concluded that the representations alleged in those paragraphs were not made. 178 For these reasons, in my view The Good Guys did not engage in misleading and deceptive conduct as alleged in relation to the Nunawading store visit. For the same reasons, The Good Guys did not make false or misleading representations as alleged in paragraph 31 of the pleading.

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First Chadstone Store Visit 179 The key elements of the Director's case in relation to this store visit are set out in paragraphs 34, 35 and 36 of the pleading which read as follows: 34. The Director contends that in this conversation The Good Guys stated that if a customer buys a television from The Good Guys, but does not also buy an Extended Warranty, then there is nothing that The Good Guys can do to assist the customer if his or her television breaks down after 12 months from the purchase. 35. As part of the questions and responses regarding warranties and possible break down of a television between the staff member and Mr Vines and Ms Bruton, the staff member did not inform or say or explain to Mr Vines and Ms Bruton that: (a) The Good Guys, as the supplier, may in some circumstances, have a legal obligation to provide a refund or to repair or replace a television; (b) if the television completely fails, that the customer would have a choice to seek either a refund or a replacement from The Good Guys (or other supplier); or (c) the consumer guarantee and remedies provisions in the ACL or ACL (Vic) may provide a customer with a solution if their television breaks down either within or after 12 months of the purchase. 36. The conduct referred to in paragraphs 34 and 35 above constitutes conduct, in trade or commerce, which was misleading or deceptive, or likely to mislead or deceive, contrary to s 18 of the ACL and ACL (Vic) because The Good Guys: (a) represented that if a customer buys a television from The Good Guys, but does not also buy The Good Guys' Extended Warranty, then there is nothing that The Good Guys can do to assist the customer if his or her television breaks down after 12 months of the purchase, whereas under the rights and remedies conferred on customers under the consumer guarantee and remedies provisions of the ACL and ACL (Vic), The Good Guys does have an obligation, in certain circumstances, to pay a refund or provide a replacement television to a customer whose television has or develops a major failure more than 12 months after the purchase; and (b) in the context of purporting to inform and explain to potential customers the features and benefits of the products offered for sale by The Good Guys, the failure by The Good Guys to explain the matters set out in sub-paragraphs 35(a) to (c) was conduct that was likely to lead potential customers into error. (emphasis in original) 180 Unlike the other store visits, there is no audio file and no transcript of the First Chadstone Store Visit. The factual allegations must therefore be determined on the basis of the affidavit and oral evidence. As noted above, the staff member could not be identified and therefore there was no opportunity for The Good Guys to call him to give evidence. 181 I first consider whether the statement pleaded in paragraph 34 was made. Based on the evidence of Ms Bruton and Mr Vines, I accept that a statement to this effect was made. 182 I next consider whether the staff member failed to say or refer to each of the matters set out in paragraph 35 of the pleading. The affidavits of Ms Bruton and Mr Vines do not address whether the staff member referred to these matters. However, Ms Bruton gave oral evidence, which I accept, that the affidavit referred to the relevant matters and on this basis I am prepared to infer that the staff member did not refer to the matters set out in paragraph 35 of the pleading. 183 I now consider whether the conduct of The Good Guys was misleading or deceptive (or likely to mislead or deceive) as alleged in paragraph 36 of the pleading. 184 In paragraph 36(a) of the pleading, the Director alleges that, by the relevant conduct, The Good Guys engaged in misleading and deceptive conduct by representing that if a customer buys a television from The Good Guys, but does not also buy The Good Guys' extended warranty, then there is nothing that The Good Guys can do to assist the customer if his or her television breaks down after 12 months of the purchase, whereas under the consumer guarantees and related remedies in the Australian Consumer Law, The Good Guys does have an obligation, in certain circumstances, to pay a refund or provide a replacement television to a customer whose television has or develops a major failure more than 12 months after the purchase. I am not satisfied that The Good Guys made the alleged representation or engaged in misleading or deceptive conduct (or conduct likely to mislead or deceive) as alleged. The allegation is premised on the staff member having made the statement alleged in paragraph 34 of the pleading. While I am prepared to accept that he made a statement to that effect, the evidence does not permit a finding as to the precise words used. Further, the evidence of the conversation is incomplete. As the evidence in relation to the other store visits indicates, it is important to have regard to the precise words used and the conversation as a whole, as this can affect the assessment of whether the conduct was misleading or deceptive or likely to mislead or deceive. In the absence of evidence which would enable findings to be made as to the precise words used and as to the complete conversation, I am not satisfied that the conduct was misleading or deceptive or likely to mislead or deceive. Further, the whole course of conduct needs to be considered, and this includes the fact that The Good Guys made available in the store the extended warranty brochure, which referred to the consumer guarantees and related remedies in the Australian Consumer Law. 185 The Director alleges that the representation pleaded in paragraph 36(a) was a representation with respect to a future matter and relies on s 4 of the Australian Consumer Law. For the reasons given above, I am not satisfied that the representation was made. 186 In paragraph 36(b) of the pleading, the Director alleges that, by the relevant conduct, The Good Guys engaged in misleading and deceptive conduct because, in the context of purporting to inform and explain to potential customers the features and benefits of the products offered for sale by The Good Guys, the failure by The Good Guys to explain the matters set out in paragraphs 35(a) to (c) of the pleading was conduct that was likely to lead potential customers into error. For largely the same reasons as set out above in relation to paragraph 36(a), I am not satisfied that The Good Guys engaged in misleading and deceptive conduct (or conduct likely to mislead or deceive) as alleged. In the absence of evidence which would enable findings to be made about the precise words used by the salesperson in the part of the conversation dealt with in the affidavits of the CAV inspectors, and in absence of a complete account of the conversation, I am not satisfied that the circumstances were such that it was misleading or deceptive (or likely to mislead or deceive) not to refer in the conversation to the matters set out in paragraphs 35(a) to (c) of the pleading. Further, the course of conduct included The Good Guys making available the extended warranty brochure, which provided a description of the consumer guarantees and related remedies. 187 For these reasons, I conclude that The Good Guys did not engage in misleading and deceptive conduct as alleged in relation to the First Chadstone Store Visit. For the same reasons, I conclude that The Good Guys did not make false or misleading representations as alleged in paragraph 37 of the pleading.

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Second Chadstone Store Visit 188 The key elements of the Director's case in relation to this store visit are set out in paragraphs 41, 42 and 43 of the pleading which read as follows: 41. The Director contends that in these conversations statements to the following effect were made on behalf of The Good Guys: (a) The Good Guys does not offer a refund for a television that develops a big problem within the first 12 months of the purchase. The Good Guys would provide a refund only if Sharp (the manufacturer) is willing to take the faulty television back and give the money back to The Good Guys. (b) If the customer gets the Extended Warranty and something goes wrong with a television 18 months after the purchase, The Good Guys' related company (administering the Extended Warranty) will replace the television with a new one but if the customer does not get the Extended Warranty, then The Good Guys cannot do anything. (c) If the television breaks down within 1 month after the purchase, the customer can get a refund, but after that period the customer can only get a replacement, not a refund. This is the case anywhere in Australia. (d) After 12 months of purchasing a television, if a customer did not get the Extended Warranty and the television develops a problem, the customer is on his or her own. 42. As part of the questions and responses regarding warranties and possible break down of a television between Sunil and Ms Lim and Mr Vlahakis, Sunil did not inform or say or explain to Ms Lim and Mr Vlahakis that: (a) The Good Guys, as the supplier, may, in some circumstances, have a legal obligation to provide a refund or to repair or replace a television; (b) if the television fails completely, that the customer would have a choice to seek either a refund or a replacement from The Good Guys (or other supplier); or (c) the consumer guarantee and remedies provisions in the ACL and ACL (Vic) may provide a customer with a solution if their television breaks down either within or after 12 months of the purchase. 43. The conduct referred to in paragraphs 41 and 42 above, constitutes conduct in trade or commerce, which was misleading or deceptive or likely to mislead or deceive contrary to s 18 of the ACL and ACL (Vic) because by that conduct The Good Guys: (a) represented that a Sharp television comes with a 12 month manufacturer's warranty and if a customer has any problems with the television in the first 12 months, Sharp (the manufacturer) will replace it straightaway which is why the manufacturer's warranty is very important, whereas in addition to any rights conferred by a manufacturer's warranty, a customer has rights and remedies under the consumer guarantee and remedies provisions of the ACL and ACL (Vic) which, in certain circumstances, include the right to get a refund from The Good Guys, as the supplier; (b) represented that The Good Guys does not offer or provide a refund to a customer for a Sharp television that develops a big problem within 12 months of the purchase. The Good Guys would provide a refund only if Sharp (the manufacturer) is willing to take the faulty television back and give money back to The Good Guys, whereas under the consumer guarantee and remedies provisions of the ACL and ACL (Vic), The Good Guys may have an obligation to provide a refund to a customer in respect of a television which has or develops a major failure (either within 12 months or after 12 months of the purchase) and independently of any agreement with the manufacturer; (c) represented that if something goes wrong with a television 18 months after the purchase, then if the customer has The Good Guys' Extended Warranty, they will replace the television with a brand new one, but if a customer does not buy The Good Guys' Extended Warranty, then The Good Guys cannot do anything, whereas regardless and independent of whether a customer does or does not buy The Good Guys' Extended Warranty, the consumer guarantee and remedies provisions of the ACL and ACL (Vic) impose an obligation on The Good Guys, as a supplier, in certain circumstances, to provide a refund or a replacement television even 18 months after the purchase; (d) represented that if a customer buys a television from The Good Guys and it breaks down within 1 month after the purchase, the customer can get a refund, but after that period the customer can only get a replacement, not a refund, and that this is the case anywhere in Australia, whereas under the consumer guarantee and remedies provisions of the ACL (which apply all over Australia) and ACL (Vic), the customer may be entitled to a refund beyond the period of 1 month after purchase of the television; and (e) in the context of purporting to inform and explain to potential customers the features and benefits of the products offered for sale by The Good Guys, the failure by The Good Guys to explain the matters set out in sub-paragraphs 42(a) to (c) was conduct that was likely to lead potential customers into error. (emphasis in original) 189 I start by considering whether each of the statements pleaded in paragraph 41 was made. The passage of the transcript relied on by the Director in support of each pleaded statement is identified in the Annexure. My conclusions and reasons in respect of each of the statements alleged is as follows: (a) I accept that the salesperson made the statements alleged in paragraph 41(a) of the pleading, namely that The Good Guys does not offer a refund for a television that develops a "big problem" within the first 12 months of the purchase; and that the Good Guys would provide a refund only if Sharp (the manufacturer) is willing to take the faulty television back and give the money back to The Good Guys. But, as discussed below, these statements need to be read in context. (b) I do not accept that the salesperson made the statement alleged in paragraph 41(b). It is not reflected in the passage relied upon. It does not contain the negative proposition that, if the customer does not get the extended warranty, then The Good Guys cannot do anything. To the extent that the Director relies on the words "then that's it", I do not think it is clear that these words convey the statement alleged. (c) I do not accept that the salesperson made the statement pleaded in paragraph 41(c). The relevant passage commences with Mr Vlahakis referring back to the salesperson's earlier statement that if the television breaks down within a month the customer can get a refund. After a couple more sentences which seem to relate to the situation within a month, Mr Vlahakis asked, "But anything after that." The salesperson responded, "After that they just replace, they don't refund." In my view, it is not clear that the salesperson was making a statement about the customer's rights rather than usual practice. (d) I accept that the salesperson said that, if the customer did not get the extended warranty, then after 12 months the customer was "pretty much" on his or her own. I do not accept that the salesperson made the unqualified statement alleged in paragraph 41(d) of the pleading. 190 Next I consider whether the salesperson failed to say or refer to each of the matters set out in paragraph 42 of the pleading: (a) I accept that the salesperson did not say that The Good Guys, as the supplier, may, in some circumstances, have a legal obligation to provide a refund or to repair or replace a television. (b) I accept that the salesperson did not say that if the television fails completely, the customer would have a choice to seek either a refund or a replacement from The Good Guys (or other supplier). (c) I accept that the salesperson did not say that the consumer guarantees and remedies in the Australian Consumer Law may provide a customer with a solution if his or her television breaks down (either within or after 12 months of purchase). 191 I now consider whether the conduct of The Good Guys was misleading or deceptive (or likely to mislead or deceive) as alleged in paragraph 43 of the pleading. 192 In paragraph 43(a) of the pleading, the Director alleges that, by the relevant conduct, The Good Guys engaged in misleading and deceptive conduct by representing that a Sharp television comes with a 12 month manufacturer's warranty and if a customer has any problems with the television in the first 12 months, Sharp (the manufacturer) will replace it straightaway which is why the manufacturer's warranty is very important, whereas in addition to any rights conferred by a manufacturer's warranty, a customer has rights and remedies under the consumer guarantees and related remedies in the Australian Consumer Law which, in certain circumstances, include the right to get a refund from The Good Guys, as the supplier. I do not think that The Good Guys made the representation or engaged in misleading and deceptive conduct (or conduct likely to mislead and deceive) as alleged. The representation does not reflect any of the statements pleaded in paragraph 41 which I have accepted were made. I note that in the passage immediately preceding the passage with the number 41(a) alongside it, Mr Vlahakis asked if the television "definitely" comes with a 12-month warranty. The salesperson said it definitely did and went on to say that if there were any problems in the first 12 months, Sharp (the manufacturer) would "replace it straightaway". He was here focusing on how the manufacturer's warranty operates in practice. After a reference to the ACCC being "very strong" in enforcing any warranty, the salesperson continued to refer to the practical operation of the manufacturer's warranty, saying that "[y]ou just call them, and somebody comes [to assess it] … [a]nd if they can't fix it on the spot, they replace it". In this passage, the salesperson was merely describing the operation of the manufacturer's warranty in response to the questions he was asked. In any event, to the extent that the salesperson conveyed that the manufacturer's warranty was very important, this was not in my view misleading. The manufacturer's warranty had a level of certainty about it which the consumer guarantees do not. 193 In paragraph 43(b) of the pleading, the Director alleges that, by the relevant conduct, The Good Guys engaged in misleading and deceptive conduct by representing that The Good Guys does not offer or provide a refund to a customer for a Sharp television that develops a big problem within 12 months of the purchase and that The Good Guys would provide a refund only if Sharp (the manufacturer) is willing to take the faulty television back and provide a refund to The Good Guys, whereas under the consumer guarantees and related remedies in the Australian Consumer Law, The Good Guys may have an obligation to provide a refund to a customer in respect of a television which has or develops a major failure (either within or after 12 months of the purchase) and to do so independently of any agreement with the manufacturer. Although I accept that the salesperson made the statements alleged in paragraph 41(a) of the pleading, these need to be seen in context. As referred to above, in the passage immediately preceding the passage with the number 41(a) alongside it, the focus was on the practical operation of the manufacturer's warranty. It was in that context that Ms Lim asked whether "you guys offer" a refund or repair if there's a "real big problem in the first 12 months". The salesperson said, "[n]ot refund, no, no refund" and that "they" (Sharp) would exchange it for a new television, which he considered to be "fair enough" and "fine". He also said that if Sharp is happy to take it back and give the money back, "we'll do it". Given the context and the vagueness of the language (both in the questions and answers), it is not clear whether the salesperson was making a representation about the customer's rights or The Good Guys' obligations. It may well be that he was merely describing the way problems in the first 12 months are usually resolved to the satisfaction of the customer. In any event, the conduct of The Good Guys needs to be considered as a whole, and this includes making available in the store the extended warranty brochure. 194 In paragraph 43(c) of the pleading, the Director alleges that, by the relevant conduct, The Good Guys engaged in misleading and deceptive conduct by representing that if something goes wrong with a television 18 months after the purchase, then if the customer has The Good Guys' extended warranty, they will replace the television with a new one, but if a customer does not obtain The Good Guys' extended warranty, then The Good Guys cannot "do anything", whereas regardless and independent of whether a customer does or does not obtain The Good Guys' extended warranty, the consumer guarantees and related remedies in the Australian Consumer Law impose an obligation on The Good Guys, as a supplier, in certain circumstances, to provide a refund or a replacement television even 18 months after the purchase. This allegation is evidently premised on the statement alleged in paragraph 41(b) having been made. As set out above, I do not accept that that statement was made. It follows that this allegation is not made out. 195 In paragraph 43(d) of the pleading, the Director alleges that, by the relevant conduct, The Good Guys engaged in misleading and deceptive conduct by representing that if a customer buys a television from The Good Guys and it breaks down within one month after the purchase, the customer can get a refund, but after that period the customer can only get a replacement, not a refund, and that this is the case anywhere in Australia, whereas under the consumer guarantees and related remedies in the Australian Consumer Law, the customer may be entitled to a refund beyond the period of one month after purchase of the television. This allegation is evidently premised on the statement alleged in paragraph 41(c) having been made. As set out above, I do not accept that that statement was made. It follows that this allegation is not made out. In any event, the conduct of The Good Guys needs to be considered as a whole, and this includes making the extended warranty brochure available in the store. 196 In paragraph 43(e) of the pleading, the Director alleges that, by the relevant conduct, The Good Guys engaged in misleading and deceptive conduct because, in the context of purporting to inform and explain to potential customers the features and benefits of the products offered for sale by The Good Guys, the failure by The Good Guys to explain the matters set out in paragraphs 42(a) to (c) of the pleading was conduct that was likely to lead potential customers into error. In my view, The Good Guys did not engage in misleading and deceptive conduct (or conduct likely to mislead or deceive) as alleged. First, to the extent that this allegation relies on the salesperson's statement that, if the customer did not get the extended warranty, then after 12 months the customer was "pretty much" on his or her own, the statement needs to be seen in the context in which it was made. The statement is drawn from a long passage which is set out in the Annexure alongside the number 41(d). Specifically, the statement is drawn from the last few lines of that passage. Shortly before this, the salesperson described the practical benefits of the extended warranty. For example, he said, "[y]ou can even call every day. Every day service, every - any day, any time. Sound. You know, any port ... - HDMI plug in not working, what, call them up. They'll come - 'oh, it's not working', okay, fine mate. Go". The salesperson also said, "we have to use [Sharp] parts, all original". Mr Vlahakis then said, "[s]o basically after 12 months, if we don't get extended warranty we're on our own", to which the salesperson responded, "[p]retty much". Seen in this context, the salesperson, in giving qualified acceptance to the proposition put to him by Mr Vlahakis, may well have been referring to the absence of the day-to-day assistance he had just been describing. Secondly, the whole course of conduct needs to be considered, and this includes The Good Guys making available in the store the extended warranty brochure which provided a description of the consumer guarantees and related remedies in the Australian Consumer Law. 197 The Director alleges that the matters pleaded in paragraphs 43(a)-(d) were representations with respect to future matters and relies on s 4 of the Australian Consumer Law. For the reasons given above, I have concluded that the representations alleged in those paragraphs were not made. 198 For these reasons, in my view The Good Guys did not engage in misleading and deceptive conduct as alleged in relation to the Second Chadstone Store Visit. For the same reasons, The Good Guys did not make false or misleading representations as alleged in paragraph 44 of the pleading.

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Geelong store visit 199 The key elements of the Director's case in relation to this store visit are set out in paragraphs 16, 17 and 18 of the pleading in proceeding No VID 508 of 2014 which read as follows: 16. The Director contends that, in these conversations, statements to the following effect were made on behalf of The Good Guys Geelong: (a) If the television breaks down within 12 months of the purchase, Samsung (the manufacturer) will try to fix it and if Samsung (the manufacturer) cannot fix it, Samsung (the manufacturer) will replace the customer's television with a new one. (b) A customer cannot get a refund, the manufacturer will try to fix the television first and, if they cannot, the manufacturer will replace it. (c) The television comes with a 12 month manufacturer's warranty, if the customer does not get the Extended Warranty and the television breaks down at 12 months and 1 day, then The Good Guys Geelong cannot help the customer. (d) Without an Extended Warranty, a customer would be on his or her own if the television breaks down after 12 months. The Good Guys Geelong could not give the customer a refund or repair the television, or do anything. (e) The Extended Warranty product is the only way a customer will be helped out if his or her television breaks down after 12 months of the purchase. 17. As part of the questions and responses regarding warranties and possible break down of a television between Mark and Mr Bellis and Ms Montero, Mark did not inform or say or explain to Mr Bellis and Ms Montero that: (a) The Good Guys Geelong, as the supplier, may, in some circumstances, have a legal obligation to provide a refund or to repair or replace a television; (b) if the television fails completely, the customer would have a choice to seek either a refund or a replacement from The Good Guys Geelong; (c) the consumer guarantee and remedies provisions in the ACL and ACL (Vic) may provide a customer with a remedy if their television breaks down either within or after 12 months of the purchase. 18. The conduct referred to in paragraphs 16 and 17 above, constitutes conduct, in trade or commerce, which was misleading or deceptive, or likely to mislead or deceive, contrary to s 18 of the ACL and ACL (Vic) because, by that conduct, The Good Guys Geelong: (a) gave the false impression that if a customer buys a Samsung television which breaks down within 12 months of the purchase, the only recourse a customer had was against the manufacturer, whereas The Good Guys Geelong, as the supplier of the television, may also have obligations under the consumer guarantee and remedies provisions of the ACL and ACL (Vic) and, if the break down is a major failure, to offer the customer a choice between a refund or a repair or replacement, and if it is not a major failure, to repair or replace the television; (b) implied that a customer has no recourse to The Good Guys Geelong if he or she develops a problem with the television within 12 months of the purchase, whereas the ACL and ACL (Vic) gives customers rights and remedies and impose obligations on suppliers (including The Good Guys Geelong) as to consumer guarantee and remedies; (c) represented that a customer cannot get a refund for defective consumer goods, whereas, in some circumstances, retailers, as suppliers of consumer goods, are obliged to provide refunds to consumers for defective consumer goods under the consumer guarantee and remedies provisions of the ACL and ACL (Vic); (d) represented that if a customer buys a television from The Good Guys Geelong, but does not also buy the Extended Warranty product, then there is nothing that The Good Guys Geelong can do to assist the customer if the television breaks down after 12 months of the purchase, whereas under the rights and remedies conferred on customers under the consumer guarantee and remedies provisions of the ACL and ACL (Vic), The Good Guys Geelong does have an obligation, in certain circumstances, to pay a refund or provide a replacement television to a customer whose television has or develops a major failure more than 12 months after the purchase; and (e) represented (expressly or impliedly) that the Extended Warranty product is the only way a customer would have any remedy or rights if his or her television breaks down after 12 months of the purchase, whereas a customer also has rights and remedies under the consumer guarantee and remedies provisions of the ACL and ACL (Vic); and (f) further, in the context of purporting to inform and explain to potential customers their rights in the event of a breakdown or defect in the goods offered for sale by The Good Guys Geelong, the failure to refer to the matters set out in subparagraphs 17(a) to (c) above was conduct that was likely to lead potential customers into error. (emphasis added) 200 I start by considering whether each of the statements pleaded in paragraph 16 was made. The passage or passages of the transcript relied on by the Director in support of each pleaded statement is or are identified in the Annexure. My conclusions and reasons in respect of each of the statements alleged is as follows: (a) I accept that the salesperson made the statement alleged in paragraph 16(a) of the pleading, namely that if the television breaks down within 12 months of the purchase, Samsung (the manufacturer) will try to fix it and if Samsung (the manufacturer) cannot fix it, Samsung (the manufacturer) will replace the customer's television with a new one. But it is important to note that the statement was made in the context of a discussion about the manufacturer's warranty. (b) I do not accept that the statement alleged in paragraph 16(b), namely that the customer can't get a refund, was made. The discussion at this point was about the manufacturer's warranty, and did not concern refund rights in general. If the statement is limited to the position under the manufacturer's warranty, I would accept that it was made. (c) I accept that the salesperson made the statement alleged in paragraph 16(c) of the pleading, namely that the television comes with a 12 month manufacturer's warranty; if the customer does not get the extended warranty and the television breaks down at 12 months and one day, then The Good Guys cannot help the customer. (d) I accept that the salesperson made a statement that, without an extended warranty, a customer would be "pretty much" on his or her own if the television breaks down after 12 months; and The Good Guys could not give the customer a refund or repair the television, or do anything to assist such a customer. In other words, I accept that the statement alleged in paragraph 16(d) was made, with the qualification "pretty much". (e) I accept that the salesperson implicitly made a statement to the effect alleged in paragraph 16(e), namely that the extended warranty is the only way a customer will have rights or remedies if his or her television breaks down after 12 months of the purchase. 201 Next I consider whether the salesperson failed to say or refer to each of the matters set out in paragraph 17 of the pleading: (a) I accept that the salesperson did not say that The Good Guys, as the supplier, may, in some circumstances, have a legal obligation to provide a refund or to repair or replace a television. (b) I accept that the salesperson did not say that if the television fails completely, the customer would have a choice to seek either a refund or a replacement from The Good Guys (or other supplier). (c) I accept that the salesperson did not say that the consumer guarantees and remedies in the Australian Consumer Law may provide a customer with a remedy if his or her television breaks down (either within or after 12 months of purchase). 202 I turn now to consider whether the conduct of The Good Guys was misleading or deceptive (or likely to mislead or deceive) as alleged in paragraph 18 of the pleading. 203 In paragraph 18(a) of the pleading, the Director alleges that, by the relevant conduct, The Good Guys engaged in misleading and deceptive conduct by giving the false impression that if a customer buys a Samsung television which breaks down within 12 months of the purchase, the only recourse a customer had was against the manufacturer, whereas The Good Guys, as the supplier of the television, may also have obligations under the consumer guarantees and related remedies in the Australian Consumer Law and, if the break down is a major failure, to offer the customer a choice between a refund or a repair or replacement, and if it is not a major failure, to repair or replace the television. In my view, The Good Guys did not give the false impression alleged or engage in misleading or deceptive conduct (or conduct likely to mislead or deceive) as alleged. The salesperson did not say that the "only recourse" a customer had was against the manufacturer in the statement pleaded in paragraph 16(a). Nor was such an impression given by the making of the statement and the failure to say or refer to the matters set out in paragraph 17 of the pleading. Looking at the two passages set out in the Annexure with the number 16(a) alongside them, the salesperson was merely describing the practical operation of the manufacturer's warranty. 204 In paragraph 18(b) of the pleading, the Director alleges that, by the relevant conduct, The Good Guys engaged in misleading and deceptive conduct by implying that a customer has no recourse to The Good Guys if he or she develops a problem with the television within 12 months of the purchase, whereas the Australian Consumer Law gives customers rights and remedies and imposes obligations on suppliers (including The Good Guys) as to consumer guarantee and remedies. For substantially the same reasons as those given in relation to the preceding allegation, in my view The Good Guys did not make the implication or engage in misleading or deceptive conduct (or conduct likely to mislead or deceive) as alleged. The salesperson did not say (or, in my view, imply) that the customer had no recourse to The Good Guys if a problem with the television developed within 12 months; he merely described the practical operation of the manufacturer's warranty. 205 In paragraph 18(c) of the pleading, the Director alleges that, by the relevant conduct, The Good Guys engaged in misleading and deceptive conduct by representing that a customer cannot get a refund for defective consumer goods, whereas, in some circumstances, retailers, as suppliers of consumer goods, are obliged to provide refunds to consumers for defective consumer goods under the consumer guarantees and related remedies in the Australian Consumer Law. This allegation appears to be premised on the statement alleged in paragraph 16(b) having been made. As indicated above, I do not accept that that statement was made. If the allegation is premised on any of the other statements alleged in paragraph 16 of the pleading which I have found were made, the conduct of The Good Guys needs to be considered as a whole. This includes making the extended warranty brochure available in the store. Taking this into account, I do not accept that the representation was made. It follows that this allegation is not made out. 206 In paragraph 18(d) of the pleading, the Director alleges that, by the relevant conduct, The Good Guys engaged in misleading and deceptive conduct by representing that if a customer buys a television from The Good Guys, but does not also buy the extended warranty product, then there is nothing that The Good Guys can do to assist the customer if the television breaks down after 12 months of the purchase, whereas under the consumer guarantees and related remedies in the Australian Consumer Law, The Good Guys does have an obligation, in certain circumstances, to pay a refund or provide a replacement television to a customer whose television has or develops a major failure more than 12 months after the purchase. I do not think that The Good Guys made the representation or engaged in misleading and deceptive conduct (or conduct likely to mislead or deceive) as alleged. I accept that, taken in isolation, the salesperson's statement that, if the customer does not obtain the extended warranty and the television breaks down at 12 months and 1 day, then The Good Guys cannot help the customer, was incorrect because it failed to refer to the obligations of The Good Guys as supplier under the consumer guarantees and related remedies in the Australian Consumer Law. But it is necessary to consider the statement in the context of the conversation and circumstances as a whole. During the course of the conversation, the salesperson wrote his name and phone number on the extended warranty brochure and handed it to Mr Bellis. He also said, "have a read through the booklet". This was a reference to the extended warranty brochure. As discussed above, the extended warranty brochure contained a description of the consumer guarantees and related remedies in the Australian Consumer Law. 207 In paragraph 18(e) of the pleading, the Director alleges that, by the relevant conduct, The Good Guys engaged in misleading and deceptive conduct by representing (expressly or impliedly) that the extended warranty is the only way a customer would have any remedy or rights if his or her television breaks down after 12 months of the purchase, whereas a customer also has rights and remedies under the consumer guarantees and related remedies in the Australian Consumer Law. For substantially the same reasons as those set out above in relation to the preceding allegation, in my view The Good Guys did not make the alleged representation, or engage in misleading or deceptive conduct (or conduct likely to mislead or deceive) as alleged. Again, it is necessary to consider the statements made by the salesperson in the context of the conversation and circumstances as a whole. These include the fact that the salesperson handed Mr Bellis the brochure and said "have a read through the booklet". 208 In paragraph 18(f) of the pleading, the Director alleges that, by the relevant conduct, The Good Guys engaged in misleading and deceptive conduct because, in the context of purporting to inform and explain to potential customers their rights in the event of a breakdown or defect in the goods offered for sale by The Good Guys, the failure to refer to the matters set out in paragraphs 17(a) to (c) of the pleading was conduct that was likely to lead potential customers into error. In my view, the conduct of The Good Guys was not misleading or deceptive (or likely to mislead or deceive) as alleged. First, to the extent that this allegation relies on the salesperson having made the statements set out in paragraphs 16(c), (d) and (e) of the pleading (which were inaccurate or incorrect if taken in isolation), these statements need to be considered in the context of the conversation and the circumstances as a whole. These include the fact that, as discussed above, during the course of the conversation, the salesperson wrote his name and phone number on the extended warranty brochure and handed it to Mr Bellis, and said "have a read through the booklet". Secondly, the course of conduct included the fact that The Good Guys made the extended warranty brochure available to customers in the store, and this provided a description of the consumer guarantees and related remedies in the Australian Consumer Law. 209 The Director alleges that the matters pleaded in paragraphs 18(a)-(e) were representations with respect to future matters and relies on s 4 of the Australian Consumer Law. For the reasons given above, I have concluded that the representations alleged in those paragraphs were not made. 210 For these reasons, in my view The Good Guys did not engage in misleading and deceptive conduct as alleged in relation to the Geelong store visit. For the same reasons, The Good Guys did not make false or misleading representations as alleged in paragraph 19 of the pleading.

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Other issues relating to all five store visits 211 One of the arguments raised by the respondents was that, because the CAV inspectors who conducted the store visits were conversant with the consumer guarantee rights and remedies in the Australian Consumer Law, they were not misled or deceived (or likely to be so), hence the conduct was not misleading or deceptive or likely to mislead or deceive. The respondents submitted that where impugned conduct is directed at the public or a section of the public, the characterisation (as to whether the conduct is misleading or deceptive or likely to be so) may be undertaken by reference to a hypothetical individual isolated by some criterion as a representative member of the public or section of the public; but where the conduct is directed at an individual, the question is whether the conduct has a tendency to lead that individual into error. The respondents relied on Campbell v Backoffice Investments Pty Ltd (2009) 238 CLR 304 at [25]-[29] per French CJ. For the following reasons, I consider that the question of characterisation in the present case is to be approached without regard to the fact that the CAV inspectors were conversant with the consumer guarantees. First, as emphasised by French CJ in Campbell at [24], the question of characterisation (as to whether conduct is misleading or deceptive or likely to be so) is logically anterior to, and separate from, the question whether a person has suffered loss or damage. Secondly, the matter is to be considered in the context of the circumstances of the particular case and the remedy sought: see Campomar Sociedad, Limitada v Nike International Limited (2000) 202 CLR 45 at [99] and [101] per Gleeson CJ, Gaudron, McHugh, Gummow, Kirby, Hayne and Callinan JJ. In circumstances where a private party seeks damages based on alleged misleading and deceptive conduct directed towards individuals, it will be necessary to consider the effect of the conduct on the individuals. But it does not follow that in all cases involving conduct directed to individuals, it is necessary to consider the effect of the conduct on them. In the present case, the Director primarily seeks declarations; he does not seek damages. Thirdly, as noted by McHugh J in Butcher v Lachlan Elder Realty Pty Ltd (2004) 218 CLR 592 at [112], the words "or is likely to mislead or deceive" were inserted into s 52(1) of the Trade Practices Act 1974 (Cth) by amendment in 1977. He continued: Those words make it clear that it is unnecessary to prove that the conduct in question actually deceived or misled anyone. The amendment expands the scope of s 52 and makes it, in the oft-quoted words of Fox J in Brown, "a comprehensive provision of wide impact". The section establishes a norm of conduct with which corporations must comply. The failure by a corporation to observe that norm of conduct has the consequences provided for in Pt VI of the Act. (footnotes omitted) Although McHugh J was in dissent in Butcher, these comments express generally accepted principles, and another passage from his judgment in Butcher was quoted with approval by Gummow, Hayne, Heydon and Kiefel JJ in Campbell, as set out in paragraph [150] above. These considerations support the view that, in a context such as this, the task of characterisation is to be approached by reference to the impugned conduct and it is not to the point that the CAV inspectors were conversant with the consumer guarantees and related remedies. 212 Another argument raised by the respondents was that the conduct in question was not "in trade or commerce" because the CAV inspectors attended the stores in their capacity as investigating officers rather than consumers; hence there was no potential or actual trading or commercial relationship. The respondents relied on (among other cases) Concrete Constructions (NSW) Pty Limited v Nelson (1990) 169 CLR 594 at 602-604 and Street v Luna Park Sydney Pty Ltd (2009) 223 FLR 245 at [215]. In my view the conduct of The Good Guys bore a trading or commercial character as it formed part of the promotion for sale of goods and extended warranties for goods. The fact that the CAV inspectors were posing as consumers and did not intend to trade does not deprive it of this character. Although I do not find it necessary to rely on this, I note that the definition of "trade and commerce" in s 2 of the Australian Consumer Law provides that the expression includes "any business … activity".

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(1) Melton store visit Pleading paragraph (VID 507 of 2014) Transcript … 21(a) GARY: Well, if you're looking at a 55 and you want 3D, that would be the one I'd recommend. MR BELLIS: So what does that come with 12-month warranty? GARY: 12 months, they're all 12 months. MR BELLIS: Everything is 12 months. GARY: You can extend it out, I would advise doing it. MR BELLIS: You would? GARY: Yes, for the simple reason, the only thing that really goes wrong with these is the power source. The part is $350, labour to put it in is another $250. MR BELIS: Okay. GARY: Okay. MR BELLIS: So if you get the warranty then - - - GARY: Yep, you'd be covered. Because our warranty also covers wear and tear. MR BELLIS: Okay. … 21(b) and 21(c) MR BELLIS: Good on the energy too. So what happens if I - if you don't get the warranty. GARY: Yep. MR BELLIS: And you get a problem. GARY: Yep. MR BELLIS: Are we in trouble? GARY: Basically yes. MR BELLIS: Okay, so with the first - with the manufacturer's warranty, we just - do we call you or you call them or? GARY: No, you call them. MR BELLIS: Okay. GARY: And they'll come out to you. MR BELLIS: Yeah, and so after that, if we don't get the warranty, and we've got a major problem we're in trouble. GARY: You have got a major problem. MS MONTERO: If we have a major problem, we have a major problem, okay. GARY: That's about it. Excuse me major, but we've got a problem. MR BELLIS: Yeah, sure. So you wouldn't be able to - - - GARY: You can't (indistinct). MR BELLIS: I've been burnt before, that's why I want to ask. GARY: No, no - - - MS MONTERO: So you can't buy the warranty afterwards? GARY: No. MS MONTERO: So, no, you have to buy it at the same time. GARY: Yes. To sell a warranty halfway through the thing, you have to be insurance brokers and we're not. MS MONTERO: Okay. … GARY: That would be probably one of the Samsungs I'd recommend (indistinct) MR BELLIS: Yep. I guess no-one does refunds. GARY: They do have the - their top of the range one, but that's just on three grand. MR BELLIS: Yeah, okay, that's probably a bit much. GARY: At the moment, value for money. MR BELLIS: It's a lot of money, if we don't get the extended warranty, isn't it? GARY: Well, look, to be brutally honest, I never used to buy an extended warranty, then my washing machine tried to kill me - - - MS MONTERO: How does a washing machine try to kill you? GARY: The arm broke in the spin cycle when it was doing 1800 revs, and threw the barrel outside the front of the washing machine. MS MONTERO: Wow, okay. MR BELLIS: I'd want a refund in that circumstance. GARY: I was down there washing the dog, washing machine is there, rattle, rattle, rattle. What the hell. MS MONTERO: Dog survived as well? GARY: Dog was up there. Dripping wet and she just went (indistinct) MS MONTERO: And never wanted a bath again. GARY: No. She wasn't a very happy little dog for a while after that. 21(d) MR BELLIS: Does anyone do refunds any more? It seems like everyone just - - - GARY: Nup. MR BELLIS: - - - people just replace stuff. GARY: Yep. Give me a sec. … 21(b) and 21(e) MR BELLIS: So if we get the warranty, do we call you guys or we just call them if there's an issue? GARY: The first year you still phone Samsung, after that, on this thing, phone number, you phone them, they'll do everything for you. MR BELLIS: Okay. GARY: You do not have to take the TV anywhere, you do not have to do anything, they will do it all for you. MR BELLIS: Okay. GARY: If they cannot fix it, you get a new TV, not a refurbished TV. MS MONTERO: Okay. GARY: And it will be the latest model. They don't go out trying to outsource something that's 12-18 months old. MR BELLIS: Okay. GARY: They don't do it. MR BELLIS: So you can get an upgrade, that's - - - GARY: Well, basically, yeah. MR BELLIS: If something goes wrong, sure. All right. Want to think about it? MS MONTERO: It's up to you. MR BELLIS: Yeah, no, we need to have a bit of a think about it. GARY: Not a problem …

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(2) Nunawading Store Visit Pleading paragraph Transcript (VID 507 of 2014) … MR BELLIS: Yeah, before the smart phones. So they're all - do they both - I guess everything is 12-month warranty and all that sort of stuff these days. YASMAN: Correct, yes. MR BELLIS: So, okay. MS MONTERO: Is it worth getting the extended warranty then? YASMAN: Look, I'd say another year or two is a good idea to have. Three or four years, that's your decision, if you want to take it up that further. 28(a) MR BELLIS: So what happens if, like in the first 12 months if it breaks. YASMAN: If it goes bung in the first 12 months, Samsung covers you. MR BELLIS: Okay. YASMAN: So they come to your house, they'll assess the TV. If they can fix it, they will, if they can't, they'll give you a brand new TV. 28(b) and (c) MR BELLIS: What about after 12 months, if we don't get the - - - YASMAN: You're in trouble. You're up poo creek. 28(c) and 28(d) MR BELLIS: Oh really. YASMAN: Look, you can probably - with an item that's about two grand, you can take it through to Consumer Affairs, that's again, if you want to do that. It can take up to between three and nine months to get a resolution from it. Generally you will probably get warranty on it, but it's putting up with the TV for between let's say three to nine months, of that resolution period, whether you can do without your tele. MR BELLIS: What will they do? YASMAN: They'll probably say, "Look, you are covered in warranty," - - - MR BELLIS: Yep. YASMAN: And make Samsung come to your house and fix it. MR BELLIS: Oh, okay. YASMAN: So. MR BELLIS: Oh, even after the 12 months. YASMAN: Correct. And if they can't fix it, they say, "all right, well you've used it for let's say 15 months or 18 months" - - - MR BELLIS: Yep. YASMAN: The pro rata is maybe Samsung (indistinct) 500 or 600 bucks and they could give that to you and you put it towards your next TV. MR BELLIS: Yep. YASMAN: That's the whole issue if you don't have the warranty. MR BELLIS: But I've got to deal - I'd have to deal with them, not you guys. YASMAN: Correct. MS MONTERO: With Samsung or Consumer Affairs? YASMAN: Consumer Affairs first, and they deal directly with Samsung. MR BELLIS: Okay. MS MONTERO: Okay. YASMAN: So again, it depends how much you pay, if you paid $500 for a TV and it goes bung after 15 months - - - MR BELLIS: Cause I've been burnt in the past, that's why I'm asking. YASMAN: Don't be surprised if they say "look, you're not covered." MR BELLIS: Yep. YASMAN: For a TV that's let's say, 2, 2-3, and it fails after 18 months, there is an implied warranty there as well, but it's up to yourself to pursue that, they're not going to offer that to you. Samsung is going to say, "Look, you're not covered." Then you have to write a letter, it goes to them, they contact Samsung, then they say, "all right, we'll work for a resolution, the customer is covered for $500," and you go, well that's not good enough, so it's just backwards and forwards. But there is an implied thing, but you have to follow that up. MR BELLIS: Yeah, okay. YASMAN: You know. 28(e) MR BELLIS: What about refunds, do you do - like if, because this is what happened to me previously, it wasn't with Good Guys. YASMAN: Yep. MR BELLIS: Like I had an older Sony, and you know how you get the lines that come through here. YASMAN: Yep, they're pixels. MR BELLIS: It was screwed, but I asked for a refund and they wouldn't give me a refund. YASMAN: Yeah, they won't give you a refund. MS MONTERO: So Good Guys don't give refunds. YASMAN: It's not us. MS MONTERO: Oh okay. YASMAN: So the warranty, even if you sort of go ahead - - - MS MONTERO: (indistinct) YASMAN: Sorry, even if you go ahead with this, it goes to a separate company. MR BELLIS: Yeah, okay. YASMAN: That's - we're the only ones that have an exclusive to that, so basically what our warranty implies, let's say forget it, let's say you buy it, it goes past the first year, you buy an extra two years, it goes bung after let's say 26 months. They'll assess it. So we'll come to your house and we'll have a look at the tele. MR BELLIS: Yep. YASMAN: If it's the screen, generally that's the most expensive part to fix. MR BELLIS: (indistinct) yeah. YASMAN: So we can say, "all right, well to order it and put it in, might cost this much". MR BELLIS: Yep. YASMAN: They say, well it's not really worth it, replace the tele. So what happens in that case, you get a brand new TV. If it's something they can't fix, you get a brand new TV. If it's a problem that's occurred more than three times, they'll replace the TV for you. So that's our warranty, so it's sort of like, it's watertight, it protects you, for in-home service and any major fault that's with the TV. MR BELLIS: Yep. YASMAN: If it can't be fixed, it's replaced new for old. 28(f) MS MONTERO: That's only if you get the extended warranty? YASMAN: Correct. But if you don't have the warranty, we can't do anything, because it's up to them to give us a credit. If they say to us, "we're not going to give you a credit, then we can't give you any money back, because then we're out of pocket." MR BELLIS: But if they do - - - YASMAN: But again, it's up to yourself to deal with them. MR BELLIS: Yeah. YASMAN: I mean we can deal with them for you, we can send out an email. MR BELLIS: Yeah. YASMAN: Then they'll say, "look, get the customer to contact us," and then they deal directly with you. The first two weeks, we're allowed to swap it in store, after that it's basically - we're happy to call Samsung for you, get them out to your house, but it's basically Samsung's warranty thereafter. MS MONTERO: So do we - like during the first 12 months though, do we have to call Good Guys if there's a problem, or do we just ring Samsung? YASMAN: You can do whatever - you can call us, we'll call for you, or you can call Samsung directly yourself. MS MONTERO: Okay. YASMAN: So we're happy to help either way. Even after the warranty, even if you've taken it, if it's expired, we're happy to help. MS MONTERO: So there's still a bit of customer service there? YASMAN: Oh absolutely, absolutely - we're here - as I said, you can just give us a call and say, "look, the Samsung is faulty, that's my docket number," terrific, we take the details and we get onto it for you, you know. MS MONTERO: Okay. YASMAN: So we - that's part and parcel of what we offer if you buy stuff from us, so. …

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(4) Second Chadstone Store Visit Pleading paragraph Transcript (VID 507 of 2014) … MR VLAHAKIS: Does this come with a warranty? SUNIL: Yeah. MR VLAHAKIS: Yeah. SUNIL: It comes with one year - it comes with one year warranty. MR VLAHAKIS: One year. MS LIM: Is that a manufacturer warranty or? SUNIL: You can extend it. It's pretty cheap to extend it. I think it's about $500 for three-four years. MR VLAHAKIS: Extension. MS LIM: Is that for both, or just this one? SUNIL: No, for this one. This one here is 229. MR VLAHAKIS: So it comes with a 12-month warranty. SUNIL: Yeah, it comes with 12 months. MR VLAHAKIS: The Sharpe one. SUNIL: But for instance, a big TV, we strongly recommend that you know, extend it. MS LIM: Okay. SUNIL: But up to you. … MR VLAHAKIS: Okay, so it definitely comes with a 12-month warranty. SUNIL: Definite. MR VLAHAKIS: Yeah. MS LIM: Okay. MR VLAHAKIS: Is that with Sharpe or with you guys? SUNIL: No, no, with Sharpe. MR VLAHAKIS: With Sharpe, okay. SUNIL: With Sharpe. MS LIM: So if there's any problems that we have in the first 12 months, say like the fifth month or something there's a line, or some burn spot - - - SUNIL: They replace it. MS LIM: You replace it? SUNIL: They replace it, straightaway. MS LIM: Okay. SUNIL: That's why I said, the warranty is very very important, because they just replace it straightaway. Any - - - MS LIM: Are you talking about the extended or? SUNIL: Any, any, any warranty, nowadays, ACCC is very strong. They have said a warranty means - like it's on sight, so you know when you see something here. MS LIM: Yeah. SUNIL: You just call them, and somebody comes there, and they go, "Oh okay," and they assess it. MR VLAHAKIS: Yeah. SUNIL: And if they can't fix it on the spot, they replace it. MR VLAHAKIS: Replace it. MS LIM: Okay. MR VLAHAKIS: I got one of my friends, because he recently bought a TV, it was only a few months old, had a massive line go through the middle. He wanted a refund, but they wouldn't give it to him. 41(a) MS LIM: Do you guys offer, like if say there's a real big problem within the first 12 months, do you guys offer a refund or repair? SUNIL: Not refund, no, no, refund. Say after one month - - - MS LIM: After one month. SUNIL: - - - offer a refund. But they will swap it for another one. MS LIM: Okay. SUNIL: You know, which is fair enough. MS LIM: Yes. SUNIL: Because refund is - see because - see how it works is, this Sharpe owns it right. So if Sharpe is happy to take it back and give the money back, we'll do it. MS LIM: Okay. MR VLAHAKIS: Okay. SUNIL: But if they won't, they'll say, "No, I can give you a brand new TV, which is fine." MS LIM: Instead. 41(b) SUNIL: Because see, after, let's say after a year and half, something goes wrong. MR VLAHAKIS: Yeah. SUNIL: They replace the TV, it will be a brand new one, with new technology, you know. MR VLAHAKIS: Okay. That's if we get extended warranty. SUNIL: That is if you get it but if you're not under warranty, then that's it. 41(c) MR VLAHAKIS: You said something, if it breaks down within a month we can get a refund. SUNIL: Of course. MR VLAHAKIS: But anything after that. SUNIL: Refund, replace, whatever - - - MR VLAHAKIS: Within a month. MS LIM: Okay. SUNIL: Yeah. MR VLAHAKIS: But anything after that. SUNIL: After that they just replace, they don't refund. MR VLAHAKIS: Yeah. SUNIL: Which is everywhere - anywhere in Australia. 41(d) MS LIM: So after 13 months, sorry, yeah, so after 12 months - like 13 months or 15 months, if I don't take the extended warranty, and something happens to the TV, what options do I have? SUNIL: Yeah, well you can call up somebody and you know - - - MS LIM: When you say somebody, you mean here or? SUNIL: No, no, no. MS LIM: Call Sharpe? SUNIL: No, any - not Sharpe. MS LIM: Any repair man. SUNIL: Sharpe will screw your happiness - excuse my French. MR VLAHAKIS: Yeah. SUNIL: Sharpe will rip you apart. MS LIM: Really. SUNIL: Oh yeah, they charge some $300 an hour or something. But you can go to a normal repair man. MS LIM: Yes. SUNIL: And take a quote, but to give a quote, they will probably charge you about $100, and after that they tell you what the repairs will be. This is expensive. You think this is a non (indistinct) LED backlit. MS LIM: Okay. SUNIL: To replace it's horrendously expensive. MR VLAHAKIS: So if we have someone look at it, and then they say you need to replace a panel or something, we have to pay for it ourselves afterwards. SUNIL: Yeah. MR VLAHAKIS: That's if we don't get extended warranty. SUNIL: 2000 bucks. MR VLAHAKIS: Out of our own pocket. SUNIL: Check it. MR VLAHAKIS: Okay. SUNIL: Check it, I'm not saying, I'm not scaring you or anything, check it, check it with - just go on Google and say "replacing 70 (indistinct) panel". MR VLAHAKIS: Yep. So you think we should get the extended warranty? SUNIL: Yeah. MR VLAHAKIS: Yeah. SUNIL: It's 200 bucks, it's ridiculously cheap. MS LIM: So 200 over per year or? SUNIL: It's not even 200 a - - - MS LIM: Two years. Two years. MR VLAHAKIS: 209 for two years. SUNIL: This is for three years, for three years. MS LIM: Okay. MR VLAHAKIS: Because I don't want to pay 2, 3 grand out of my own pocket after a year. SUNIL: Ridiculous (indistinct) in this country, I don't know (indistinct) have you guys seen the (indistinct) I come from Asia - from India. MR VLAHAKIS: Yeah. SUNIL: In India you can (indistinct) fix it, they get all this stuff, and they do something. MS LIM: It's not like that here. SUNIL: Are you kidding. They're (indistinct) like a laptop goes off - - - MR VLAHAKIS: That's the last thing, like, we don't want to pay three grand, and then within - after a year and half pay another three grand just to replace. SUNIL: Something like this - that's why I'm stressing. If you bought a 22 inch, I couldn't be bothered - - - MS LIM: So an expensive nice one - - - SUNIL: 100 bucks okay. I will still think for 100 bucks, you only pay 20 bucks for warranty, but I will still say - sorry. MS LIM: Sorry, Sunil, was it. Sunil, so how does the - okay, so how does this extended warranty work. Like so if we pay the 200, 209, on top of the 2928, how does it work? SUNIL: Then it's covered. MS LIM: So if there's any problems - - - SUNIL: You just call that phone number. MS LIM: Yep. SUNIL: Just call that phone number. MS LIM: Okay. SUNIL: It's a 24-hour phone number. MS LIM: Okay. SUNIL: Let's say for example you call at 5 o'clock in the evening. MS LIM: Yep. SUNIL: Somebody will come the next morning and they will (indistinct) you have two or three pixels (indistinct) you know what's a pixel? MS LIM: Yep. SUNIL: Dark dots coming through. MR VLAHAKIS: Yeah, yeah. SUNIL: Sometimes you will notice it. Come in and you see dark (indistinct). They replace the panel. MR VLAHAKIS: Okay. MS LIM: Okay, and I don't have to pay anything, because I've already paid for it. SUNIL: Not even excess. Like in insurance you pay excess, right. MS LIM: Yep, yep. SUNIL: 500 bucks. MR VLAHAKIS: Yeah. SUNIL: Nothing. MS LIM: Okay. MR VLAHAKIS: I think it's better if we probably go extended warranty. SUNIL: You can even call every day. Every day service, every - any day, any time. Sound. You know, any port - - - MS LIM: Any problem, they will - - - SUNIL: Port - HDMI plug in not working, what, call them up. They'll come - "oh, it's working," okay, fine mate. Go. MR VLAHAKIS: What's the maximum - how many years extended warranty we get? Up to how much? SUNIL: Maximum for this TV - they don't go too many years, they don't (indistinct). MR VLAHAKIS: Yeah. SUNIL: Because then the wear and tear kicks in - - - MS LIM: So 209 to be completely safe over the next two - so on top of the 12 months, then after that it kicks in, right. Yep. SUNIL: It's only extended til three years. MR VLAHAKIS: Three years is the maximum we can get extended warranty. SUNIL: They won't, they're not happy to give it, because it's a co-ordination between Good Guys and Sharpe. MS LIM: Okay. SUNIL: Because we have to use Sharpe parts, all original. MR VLAHAKIS: Yeah. MS LIM: Okay. SUNIL: Something goes wrong - - - MR VLAHAKIS: So basically after 12 months, if we don't get extended warranty we're on our own. MS LIM: Is that, is that - - - SUNIL: Pretty much. SUNIL: I'm not saying - look, I'm not saying something will go wrong, but anything, a remote, something as stupid as the remote, you know. What do you do, you throw it away, you'll go and get a universal remote. What for - pay for the extend to replace it. A Sharpe remote would cost you 150 bucks (indistinct) MS LIM: Do you recommend Sharpe over the other brands? …

[45]

(5) Geelong store visit Pleading paragraph (VID 508 of 2014) Transcript … MR BELLIS: Yeah, okay. And they're all, they all just got like a 12-month manufacturer's warranty? MARK: Yeah, all have a 12-month warranty. That's my uncle, that guy. That guy was my uncle. MS MONTERO: Okay. MARK: Who I sold the TV to. MR BELLIS: Oh okay, yeah. MARK: He's got basically this TV, but the next model up, okay. MR BELLIS: Okay, yep. MARK: That was about five grand. The big thing is, is with the next model up, it's got more pixels in it, so he's future-proofing himself, okay. The picture was a little bit sharper. MR BELLIS: Yeah, okay. MARK: And I said this to him as well, for the extra two grand, you probably won't see that much difference and he goes, "I want the best. I want to future-proof myself. I only buy TVs once every five years." Okay. The big thing is, is TVs do not last as long as they used to. MR BELLIS: Okay. MARK: Okay. Yes, it does come with a 12-month warranty. MR BELLIS: Yep. … MR BELLIS: Yep. No, that's all right, we're just sort of looking and asking questions and - so what happens with - how does the warranty work. MARK: Okay. 16(a) MR BELLIS: Like, if, what happens if it, you know completely busts. MARK: Yep, if they cannot fix it, they have to give you a new one. MR BELLIS: Okay. MARK: Keep in mind, if you made it into a five-year warranty, okay, and it broke down at say 4 years old - can you just give me two seconds. Ian, when you've got everything, just bring them over and then I'll work out a price. So say if it does break down at say four years old, let's be honest, they're probably not going to be able to fix it. MR BELLIS: Yep. MARK: Because technology has gone so far. If they cannot fix it, they have to replace it with the equivalent model that we've got. MR BELLIS: Yep, okay. MARK: If they can't replace it with the equivalent model, they give you that back as a gift card. Buy whatever you want. MR BELLIS: Is that if you buy the extended warranty? MARK: If you buy the extended warranty. MR BELLIS: Yeah okay. 16(a) MARK: If it breaks down in the 12 months, okay, Samsung will replace it. MR BELLIS: Replace it. MARK: Because it's only going to be 12 months, if they can't fix it. 16(b) MR BELLIS: And they'll only replace - you can't get - can you get a refund or is it just, no? MARK: They'll replace it or - they'll fix it first and then replace it. 16(c) MR BELLIS: And what if - if you don't get the extended warranty, you're in trouble? MARK: It comes with a 12-month warranty and if it breaks down at 12 months and one day, I can't help you. MR BELLIS: Okay. MARK: I'm not being mean or rude, but I seriously can't help you. 16(d) and 16(e) MR BELLIS: So you couldn't give us a refund, you couldn't repair or anything, okay. MARK: Nup, as soon as it hits 12 months, unfortunately - - - MR BELLIS: We're on our own? MARK: Pretty much. MR BELLIS: Yeah, okay. MARK: When it hits - - - MR BELLIS: I've been burnt in the past, so that's why I'm asking plenty of questions. MARK: Yeah, no, that's all right. MR BELLIS: Help this guy, if you want. MARK: That will help you out. MR BELLIS: Okay. MS MONTERO: Oh, thank you. MARK: We actually put our warranties in writing, we give it to every single customer if they extend the warranty. MR BELLIS: Yep. MARK: So you know what it covers, and what it doesn't cover. It covers all wear and tear, parts, labour, courier, everything. MR BELLIS: Sweet. MARK: For instance, this remote, or the Sony remote, it comes with a three-month warranty. MR BELLIS: Oh really. MARK: The TV comes with a 12-months - you extend the warranty, that comes actually under extended warranty. MR BELLIS: Okay, as well, yeah. MARK: Because it's a part what wears out, wear and tear. MS MONTERO: Okay. So what are you thinking? MR BELLIS: Sweet, Samsung. I don't know whether we have any more questions, do we? MS MONTERO: No. Do you think we should go? MR BELLIS: Yeah, let's go. MS MONTERO: Okay. Should we say goodbye to him? Let him know that we're thinking about it? Thanks so much for your help. We'll think about it, and then come back. MARK: I'm sorry, (indistinct) through the (indistinct). [I'm sorry, have a read through the booklet] MR BELLIS: Yeah, will do. …

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