1 The respondent must pay to the applicant the sum of $3,000 within 28 days of the date of this order.

2 The applicant must return the Star Trader software package to the respondent within 28 days of the date of this order.

1 The applicant in this case, Tracey Law ("Mrs Law"), is a 38 year old housewife with three children under four years of age. The respondent, MCI Technologies Pty Ltd ("MCI"), is a wholly owned subsidiary of Tomato Technologies Pty Ltd, a publicly listed company on the Australian Stock Exchange.

2 A substantial part of the business conducted by MCI involves selling software to facilitate the trading of shares on the stockmarket. One of the techniques used by MCI to sell its share trading software is telemarketing.

3 In August 2005, in response to a telemarketing approach, Mrs Law agreed to spend $3,000 to purchase the MCI "Star Trader" software. On receipt of the software, Mrs Law changed her mind and sought a refund. She has not used the software. MCI has refused to refund the sum of $3,000. This has resulted in Mrs Law bringing a proceeding in the Civil Claims List of the tribunal seeking the refund of her money.

4 Mrs Law contends that she was pressured into agreeing to purchase the Star Trader Software Package and that, as a matter of fairness, she should be entitled to return the package and obtain a refund. She also points to certain provisions in the Fair Trading Act 1999 ("the FTA") concerning telephone marketing agreements and submits that, in the light of those provisions, she was entitled to change her mind, return the software package, and obtain a refund.

5 MCI contends that the tribunal does not have jurisdiction to hear and determine the matter. It also joins issue with Mrs Law's claim that the circumstances surrounding the purchase were unfair. I also take it that MCI joins issue with the claim that the transaction was covered by the telephone marketing agreement provisions of the FTA.

6 In order to resolve the competing contentions of the parties, it will be necessary to closely consider the evidence and make a series of findings of fact. Based upon those findings of fact it will then be possible to determine whether the tribunal has jurisdiction: although this also involves a question of law. However, before turning to the facts in detail, it is necessary to make some observations about the procedure that has been followed in this case.

7 The Civil Claims List of the tribunal is designed to provide an inexpensive, accessible and timely dispute resolution service in relation to consumer and commercial disputes. This is particularly so in relation to what is defined as a "small claim", which, generally speaking, is a claim involving an amount not exceeding $10,000.[1] Indeed, when a small claim is being heard by the tribunal there are limitations upon professional representation and the award of costs.[2] The hearing of small claims often involves an inquisitorial approach, as the tribunal takes an active role in seeking to ascertain the truth by asking questions and initiating lines of inquiry.[3]

8 Mrs Law lodged her complaint with the tribunal on 24 November 2005. On the following day Deputy President Levine made an order in chambers under section 52 of the Service and Execution of Process Act 1992 to facilitate the prompt hearing of the proceeding. Service was then effected on MCI by mail at an address in Queensland. The documents served included a notice under the Service and Execution of Process Act 1992 which stated, inter alia, that service of the process outside Victoria was authorised if the claim concerned:

(b) a contract, wherever made, for the supply of goods or the provision of services of any kind (including financial services) within Victoria;

(f) the validity of an act or transaction under a law of Victoria.

The documents served included a notice that a hearing would be held on 9 February 2006.

9 By letter dated 16 January 2006 Mr Peter Ellis, Resolutions Manager of MCI, wrote to the tribunal, attaching detailed evidentiary material addressing the claim. In the covering letter Mr Ellis stated that MCI was unable to attend the hearing due to "geographical restrictions, jurisdictional issues and the fact that we have no video conferencing facilities available". Accordingly he applied to be represented at the hearing by a telephone hook-up. The reference to jurisdictional issues was explained in the attached material. In essence it turned on a clause, said to be contained in a licence agreement for the Star Trader software package, that the licence was governed exclusively by the laws of Queensland. It is necessary that I deal with this matter in more detail; and I do so later.

10 On 18 January 2006 Deputy President Levine considered the request to have a hearing by telephone and refused the request. In his (in chambers) order Deputy President Levine noted that he relied upon the nature and value of the claim in forming the view that a hearing by telephone or video conference was not appropriate.

11 On 24 January 2006 Mr Ellis wrote to me, as president of the tribunal, effectively asking me to overturn the procedural order made by Deputy President Levine. I decided not to intervene. In the first instance I doubt whether I would have had the power to have intervened in the circumstances. But, second, I agreed that the matter was not well suited to a telephone hearing; and that it was preferable to conduct an oral hearing in the normal fashion. There were several reasons for this view. First, there was a potential conflict in relation to matters of fact, which would have been more difficult to determine if one party was participating by telephone. Second, the jurisdictional issues that had been raised by MCI were of general importance. Third, it was likely that this was not a one-off circumstance in which MCI was supplying goods in Victoria to residents of Victoria; hence it was not unreasonable that MCI attend in Victoria to contest the case. I stress that the conduct of a hearing where one party appears by telephone can be problematic, especially when issues of credibility arise. MCI was informed of the fact that I did not intend to intervene or override the procedural order made by Deputy President Levine in two ways. First it was sent a letter to that effect on 1 February 2006 via facsimile transmission. Second, the same letter was forwarded by post that day.

12 On 8 February 2006 MCI informed the tribunal that it did not intend to be represented at the hearing the following day.

13 The hearing proceeded on 9 February 2006 with Mrs Law being sworn and giving evidence about the transaction. At about 10:30am this hearing was adjourned to enable Mrs Law to read the response lodged by MCI (with its letter dated 16 January 2006). At 11:30am the hearing resumed and Mrs Law gave further evidence and made submissions in relation to that material. In both instances I asked her a series of questions in order to elicit her evidence. At about 11:45am I instructed my associate to ring Mr Ellis so that, if he was available, he could add to his written material, if he wished. Unfortunately he was unavailable and the telephone call only elicited an automatic voice recording.

14 Although MCI was not represented at the hearing, notwithstanding having had a reasonable and full opportunity to do so, it is appropriate that I have full regard to the material lodged under cover of the letter dated 16 January 2006. Indeed, the factual findings I make draw on that material.

15 At about 9:50am on 9 June 2005 Mrs Law received a telemarketing call from a salesperson acting on behalf of MCI. That phone call was short, but led to a call later in the day at about 4:38pm. It is likely that Mrs Law requested the telemarketer to ring back later as she was busy. In the phone call on the afternoon of 9 June 2005 the salesperson - most likely a person named "Alan" - spent about half an hour explaining the virtues of the Star Trader program. He explained to Mrs Law that the software was easy to use, involved only 7 to 20 minutes per day on average to operate and could produce substantial profits. He explained that the regular price of the software was $8,900; but he could offer it to Mrs Law for a down payment of $5,900 (with the balance only payable if Mrs Law made a profit of more than $30,000 in the first 12 months of using the software).

16 Mrs Law gave evidence to the tribunal that she did not initiate the first call made to her. Indeed, she told the tribunal that she did not initiate any calls to MCI. In its written submission, MCI stated that, generally, its first contact with a potential customer arises in response to junk mail or a mail out, unless MCI has heard about a respondent by other means, such as word of mouth or newspaper advertisement. Mr Ellis of MCI says that, in the present case, Mrs Law was "referred to the company" and received a call as a result. I accept the evidence given by Mrs Law that she did not initiate the contact, but was contacted by MCI as part of a telemarketing campaign. It is unnecessary to decide how MCI targeted Mrs Law - and what may have been the precise form of "referral". The significant finding is that Mrs Law did not initiate the telemarketing call in any way.

17 After the initial sales pitch in the afternoon call on 9 June 2005 a further call was made by MCI to Mrs Law on 10 June 2005. On this occasion Mrs Law said that she had not made any decision about purchasing the software and would be away until 15 June 2005. She suggested that MCI call back at that time. On 15 June 2005 MCI phoned Mrs Law and offered to provide detailed written information about the Star Trader software. Mrs Law agreed to receive such information and this was forwarded on that day.

18 The letter dated 15 June 2005 from MCI explained that the retail price of the Star Trader software was $8,900. It also explained that Mrs Law could buy the software for $5,900; but that this offer was strictly limited and only lasted seven days. The letter outlined that the Star Trader package involved software on a CD ROM, a user manual and various other ancillary documents. The letter also explained that, at an additional cost of $42.90 per month, Mrs Law could obtain daily prices of shares to be used in conjunction with the Star Trader software. (As a practical matter, I suspect that it would be burdensome to operate the Star Trader software without the electronic delivery of daily stock prices). The letter concluded by asking Mrs Law to contact MCI "about our amazing product".

19 MCI also sent another letter to Mrs Law, also dated 15 June 2005, that provided assistance in relation to certain taxation matters that would arise if the Star Trader program was purchased and used. One aspect of this letter was to the effect that the cost of the Star Trader software program may be tax deductible expenditure.

20 On 17 June 2005 MCI contacted Mrs Law once again, ostensibly to see if the letter had arrived. On this occasion Mrs Law told MCI that she had made no decision, as she wished to talk to her husband.

21 On 21 June 2005 Mrs Law was contacted by MCI yet again. On this occasion Mrs Law clearly stated to MCI that she was not interested in purchasing the Star Trader program.

22 On 1 August 2005 another sales team within MCI initiated telephone contact with Mrs Law. It is likely that this sales team had been provided with a list of persons who had shown some interest in the Star Trader software, but who had decided not to purchase the software. On this occasion the MCI salesperson once again talked up the virtues of the share trading program. The MCI salesperson - a woman - said that she, too, had young children and she wished that she had known about Star Trader when she was still at home. This sales representative explained that there was a further "special offer" in relation to the Star Trader software. The special offer was that, although the recommended retail price of the Star Trader package was $8,900, Mrs Law could purchase the software for a $3,000 down payment, with the balance only payable if she made more than $30,000 in her first year of trading. The salesperson explained that this "special offer" was limited to the first 100 clients to accept the offer. On this occasion it is likely that Mrs Law expressed some interest in the software, but did not make any commitment to purchase the software.

23 Also on 1 August 2005 the customer service team of MCI forwarded a letter to Mrs Law further explaining its revised "special offer" of $3,000.

24 It is possible that on 2 August 2005 a salesperson with MCI called Mrs Law to follow up the matter; but I make no finding to this effect.

25 On 3 August 2005 the MCI salesperson called Mrs Law yet again. On this occasion the salesperson explained that the "special offer" was due to expire and that the purchase needed to be made on that day. On this occasion Mrs Law stated that she would accept the offer, notwithstanding that her husband was against it, and provided credit card details to pay for the software.

26 By letter dated 4 August 2005 MCI congratulated Mrs Law on her decision to purchase the Star Trader program. The letter enclosed the software on a CD ROM, a manual and other ancillary documents. There was also enclosed a short book on charting share prices.[4] Also enclosed with the letter was a tax invoice in the sum of $3,000, together with a credit card receipt.

27 One of the documents received with the software was a document called a "license agreement" [sic]. This document commenced by stating that:

your acceptance of the terms and conditions of this license agreement is declared by opening this sealed package or by using this product.

Jurisdiction: This license is governed exclusively by the laws of Queensland. The parties irrevocably submit the exclusive jurisdiction of the courts of Southport, Queensland [sic].

28 On 8 August 2005 Mrs Law signed various documents that had been provided to her by MCI. One of these was a document confirming her credit card details. Another document was a request for stock market prices to be sent electronically each day, at a cost of $42.90 per month. The third document was a form headed "Software & Copyright Declaration". Although this declaration related to the use of the software, rather than its initial purchase, it included the statement:

The user hereby acknowledges that this contract of sale is formed exclusively within Southport in the State of Queensland. The parties involved irrevocably submit to the exclusive jurisdiction of Southport in the State of Queensland.

29 On 9 August 2005 Mrs Law changed her mind and sought a refund of her payment of $3,000. At that stage she had not used the software; and she has not used it at any time since. I find that Mrs Law's decision to seek a refund was influenced by her husband who, at all times, appears to have regarded the purchase of the software as foolhardy. Significantly, Mrs Law's husband appears to have been away on a business trip at the time she made the decision to purchase the software.

30 MCI refused Mrs Law's request to refund the $3,000 in exchange for the return of the Star Trader package. A number of emails were exchanged arguing the toss about the matter. Although I have read this correspondence, ultimately little turns upon it and, except for one matter, it is unnecessary to make factual findings about it.

31 The matter upon which I think I should make findings relates to "Justice Hogan Doran". I reproduce a paragraph from an email sent by Mr Peter Ellis of MCI to Mrs Law on 17 August 2005:

I intend to give you a little more homework Tracey. You have stated that the contract was formed in Victoria as [sic] that Victorian laws apply. I draw your attention to the second last paragraph of the Software Declaration. This is an "Exclusive" statement in the words of Justice Hogan Doran of the Supreme Court and is 100% enforceable.

The reference to "Justice" Hogan Doran was not a one-off. A similar reference occurred in the MCI submission to the tribunal and in another email to Mrs Law (dated 31 August 2005). The MCI submission to the tribunal stated that the contract had been the result of advice from "Justice Hogan Doran" and continued:

You have a Justice of the Supreme Court supporting our Exclusive Jurisdiction Clause 100%.

32 As far as I am aware, there is no judge of a superior court in Australia named Hogan Doran; nor has there ever been a superior court judge by that name. However the website of the New South Wales Bar Association records that there is a barrister practicing in New South Wales named Justin Adrian Nash Hogan-Doran. Indeed, Mr J Hogan-Doran is recorded as having appeared for MCI in a case Oubani v MCI Technologies Pty Ltd[5] before the New South Wales Supreme Court in July 2004. I think it is likely that as the events surrounding the Oubani case have been discussed within MCI, "Justin Hogan-Doran" has metamorphosed into "Justice Hogan Doran of the Supreme Court". Hence I do not find that the reference to "Justice Hogan Doran" to be deliberately misleading. But I find that it was misleading nonetheless: there is a significant difference between a superior court precedent and a barrister's opinion.

33 The central purpose of the FTA is to promote and encourage fair trading practices. The FTA seeks to do this in numerous ways. First, it identifies and regulates certain unfair practices. Some of these unfair practices are specific in nature: for example provisions in relation to "bait advertising" and "referral selling". But other unfair practices are general in character: for example in relation to unconscionable conduct[6] and misleading or deceptive conduct[7]. Second, the FTA provides that specified conditions and warranties are to be implied in certain contracts of supply. Third, the FTA establishes a regime in relation to unfair terms in consumer contracts. Fourth, the FTA regulates certain practices, such as contract sales agreements, telephone marketing agreements and lay-by sales. Fifth, the FTA establishes the office of Director of Consumer Affairs Victoria and provides for the functions and powers of the Director. Sixth, the FTA empowers the Victorian Civil and Administrative Tribunal ("VCAT" or "the tribunal") in relation to certain disputes under the FTA.[8]

34 Section 159 of the FTA provides in sub-section (1):

A person who suffers loss, injury or damage because of a contravention of a provision of this Act may recover the amount of the loss or damage or damages in respect of the injury by proceeding against any person involved in the contravention.

Such a proceeding may be brought before VCAT or any court of competent jurisdiction. In an action brought pursuant to section 159(1) of the FTA it is necessary for the applicant (or plaintiff) to establish that there has been a contravention of a provision of the FTA. For example, such an action might be based upon a breach of a provision in relation to bait advertising, or it may allege unconscionable conduct, or it may allege misleading or deceptive conduct.

35 VCAT is also given the role of hearing and determining a "consumer and trader dispute".[9] This role overlaps its role in hearing and determining actions for damages under section 159(1) of the FTA; but it provides broader powers to the tribunal than those that would be available under section 159(1).

36 A "consumer and trader dispute" is defined as:

A dispute or claim arising between a purchaser or possible purchaser of goods or services and a supplier or possible supplier of goods or services in relation to a supply or possible supply of goods or services.[10]

This includes disputes or claims in negligence, nuisance or trespass that relate to the supply or possible supply of goods or services, but does not include a dispute or claim related to a personal injury that is for an amount exceeding $10,000.[11]

37 Section 108(2) of the FTA empowers the tribunal to determine a consumer and trader dispute by ordering the payment of money, varying terms of a contract, ordering the refund of any money paid under a contract or making a range of other orders in relation to a contract. The array of powers available to the tribunal in determining a consumer and trader dispute are much broader than those that would be available to the tribunal or a court in determining an action for damages.

38 Further, section 109 of the FTA provides that, in addition to its powers under section 108, the tribunal, in determining a "consumer dispute" or a "trader-trader dispute", may make:

any order it considers fair including declaring void any unjust term of a contract or otherwise varying a contract to avoid injustice.

Section 109(2) sets out a range of considerations that the tribunal may have regard to in determining whether a term of a contract is unjust. The section defines what is meant by a "consumer dispute" and a "trader-trader dispute".[12] Essentially a consumer dispute means a dispute relating to the supply of goods or services to a consumer, without any monetary limit; whereas a "trader-trader dispute" is a dispute in relation to the supply of goods or services in trade or commerce, but this is limited to disputes that involve a sum not exceeding $10,000.[13]

39 The powers available to the tribunal under section 108(2) and 109(1) are extremely broad. In giving the tribunal such broad powers, the Parliament should be taken as intending that in determining a consumer and trader dispute, a consumer dispute, or a trader-trader dispute (as the case may be), the tribunal should be able to make orders that are fair in all the circumstances. In determining what is fair in all the circumstances the tribunal will be guided by, but not confined to, provisions of the FTA which identify unfair practices or regulate trading practices.

40 In relation to a "consumer dispute" and a "trader-trader dispute" the fact that the tribunal has a specific power to "make any order it considers fair" indicates that, in determining this type of dispute, the tribunal is not bound by the principles of the common law or by statutory provisions; although such principles and provisions may provide guidance. In relation to a "consumer and trader dispute" that is not a "consumer dispute" or a "trader-trader" dispute, the position is less clear. But the range of powers available to the tribunal under section 108(2) of the FTA - including the power to vary any term of a contract and to order a refund of any money paid under a contract - may mean that it is Parliament's intent that such a dispute also be determined by reference to the general principle of fairness.

41 Neither section 108 nor 109 is a procedural provision of the type considered by the Full Court of the Supreme Court of Victoria in Walsh v Palladium Car Park Pty Ltd.[14] Rather these sections seek to overlay the common law (and actions based on contravention of statute) with substantive principles - based on fairness - pursuant to which certain disputes may be resolved.

42 As I have explained, VCAT has jurisdiction under two different sections of the FTA. The jurisdiction under section 159 of the FTA is to hear and determine actions for damages as a result of a contravention of a provision of the FTA. The jurisdiction under section 108 of the FTA is to hear and determine a "consumer and trader" dispute.

43 The FTA is a law enacted by the Parliament of Victoria. Section 6 of the FTA provides that the Act applies "within and outside Victoria"; and that it applies outside Victoria "to the full extent of the extra-territorial legislative power of the Parliament". This may mean that the FTA only operates in relation to subject-matter that has a relevant connection with Victoria, although the extent of the connection is to be considered liberally.[15] Thus it is unlikely that the (Victorian) FTA would have application to the supply of goods or services where this is exclusively a Queensland transaction: that is, both the supplier and the purchaser of the goods or services are resident in Queensland and where the supply occurs in Queensland. However where the supply, or possible supply, of goods or services occurs, or is proposed to occur, in Victoria, the (Victorian) FTA applies to any dispute or claim arising in relation to such a supply or possible supply. The Victorian Parliament may pass a law regulating the supply of goods to Victorian purchasers - at least where the goods are supplied in Victoria - whether the supplier is resident in Victoria or not.

44 The jurisdiction of VCAT to hear an action for damages under section 159 of the FTA, or to hear and determine a consumer and trader dispute, does not depend upon the existence of a contract. The word "contract" does not appear in section 159; nor does it appear in section 107 of the FTA. Rather it turns on whether there has been a contravention of the FTA or a supply of goods or services in Victoria. Hence VCAT's jurisdiction cannot depend upon the place in which a contract is made, or a provision in a contract that the contract is formed in a particular location, or that a named jurisdiction is to be the exclusive jurisdiction for determining disputes under the contract.

45 In Oubani v MCI Technologies Pty Ltd[16] Master Harrison of the New South Wales Supreme Court dealt with this question in the context of the Consumer Claims Act 1998 (NSW). The Supreme Court proceeding concerned a dispute which had been before the New South Wales Consumer, Trader and Tenancy Tribunal concerning the purchase of the software program "Blue Chip Trader" for $5,900 from MCI. Oubani, who was aged 17 years at the time of the purchase, changed his mind after receiving the software and sought a refund. MCI submitted that the Consumer, Trader and Tenancy Tribunal did not have jurisdiction to determine that matter, as the relevant contract provided that Queensland courts had exclusive jurisdiction. In order to determine this jurisdictional issue Master Harrison had to consider the definition of the term "consumer claim" in the relevant New South Wales legislation, which provided (relevantly) that a consumer claim means:

A claim by a consumer for the payment of a specified sum of money, or ... that arises from a supply of goods or services by a supplier to the consumer, whether under a contract or not, or that arises under a contract that is collateral to a contract for the supply of goods or services.

The definitions of both "consumer" and "consumer claim" are concerned with the "supply" of goods and services "whether under a contract or not". It is my view that the relevant consideration is whether goods or services were supplied to a consumer in New South Wales and not where the contract was made. The computer software was supplied to a consumer, Oubani in New South Wales so the CTTT has jurisdiction to hear this matter.

In my opinion, the decision of the court in Oubani is equally applicable to the present case.[17]

46 The material provided to VCAT by MCI did not contain the content of any advice that Mr Justin Hogan-Doran may have given to MCI. One can only speculate about this.

47 Further VCAT was not provided with any material indicating whether the terms of the contract in the present case are different than those which applied in the Oubani case. But this does not matter. The Oubani case did not turn on the terms of the contract; rather it turned on the applicable legislation.

48 It seems clear enough that the FTA is designed to be protective legislation. Rights conferred upon Victorian consumers by such legislation would be eroded if consumers were compelled to take any legal action arising from the supply of goods to them in an interstate court or tribunal. It is important that courts and tribunals interpret legislation so as to further the intent of Parliament. Such an outcome is achieved in the present case by rejecting MCI's claim in relation to jurisdiction.

49 To the extent that the claim is brought pursuant to section 159 of the FTA, the applicant must demonstrate that MCI has contravened a provision of the FTA. Division 2A of Part 4 of the FTA contains a suite of provisions dealing with telephone marketing agreements. The applicant referred to the cooling off period provided for in section 67H of the FTA. This provides that a purchaser under a telephone marketing agreement may cancel the agreement within ten days from the day on which the purchaser receives a written agreement in relation to the purchase.[18] If a telephone marketing agreement is cancelled during the cooling off period, the agreement is deemed to have been rescinded by mutual consent.[19] Further, if a telephone marketing agreement is cancelled within the cooling off period, the supplier must immediately repay to the purchaser any money paid by the purchaser under the agreement or a related contract or instrument.[20]

50 Section 67A of the FTA defines the expression "telephone marketing agreement". The definition is lengthy and depends upon a number of circumstances. It is sufficient to record that, to be a telephone marketing agreement, an agreement must be:

for the supply in trade or commerce of goods or services of a kind ordinarily used for personal, household or domestic use

and must be initiated by a telephone call by or on behalf of the supplier.

51 It is a moot point whether share trading software is a good of a kind "ordinarily used for personal, household or domestic use". Certainly software is a good of a kind that is ordinarily used for personal, household and domestic use. But is the relevant genus "software" or "share trading software"? And, if it is the latter, could not this be regarded as a good of a kind ordinarily used for "personal" use, that is engaging in trading for personal profit? Fascinating though these questions are, it is unnecessary to determine them. For reasons that I explain, the scope of section 109 of the FTA (and, possibly, section 108 of the FTA) means that it is unnecessary for VCAT to determine whether or not there has been a contravention of the FTA.

52 The dispute between the applicant and MCI is a "consumer and trader dispute" because it is a dispute that arises between a purchaser of goods and a supplier of goods in relation to the supply of goods.[21] This being so the tribunal has jurisdiction to hear the dispute and has available to it all the powers set out in section 108(2) of the FTA. These powers include the power to order the refund of any money paid under the contract between the parties.

53 The dispute between the parties may also be a "consumer dispute" as defined in section 109(4) of the FTA. This expression is defined to mean:

a dispute relating to the supply or possible supply of goods or services of a kind ordinarily used for personal household or domestic purposes but does not include a dispute relating to the supply or possible supply of goods if the supply or possible supply of the goods is for the purpose of resupply, in trade or commerce, or for the purpose of using the goods up or transforming the goods in trade or commerce.

However it is a moot point whether share trading software is a good of a kind ordinarily used for "personal household or domestic purposes"; because, on any view, the dispute is a "trader-trader dispute" as defined in section 109 of the FTA.

54 The expression "trader-trader dispute" is defined to mean:

a dispute between a purchaser or possible purchaser and a supplier or possible supplier in relation to the supply or possible supply of goods or services in trade or commerce which involves -

(a) a claim for payment of money in an amount not exceeding $10,000; or

(b) a claim for performance of work of a value not exceeding $10,000.

Mrs Law is a purchaser; MCI is a supplier; the dispute between them is in relation to the supply of goods "in trade or commerce"; and it involves a claim for payment of money in an amount not exceeding $10,000.[22]

55 Civil claims brought before the tribunal pursuant to the FTA might be categorised as follows. First, there are claims that are "consumer disputes" or "trader-trader disputes".[23] Second, there are "consumer and trader disputes"[24], which are not also "consumer disputes" or "trader-trader disputes". Third, there are disputes that are not "consumer and trader disputes". When it comes to the first category, the tribunal may make any order it considers fair; it is not required to determine the dispute solely by reference to common law principles or statutory provisions. The second category may well be on the same footing as the first category. But the third category does not enliven the wide ranging power to make any order the tribunal "considers fair". Rather, in this category of case, the tribunal must carefully consider whether or not the applicant has established that the respondent has contravened a provision of the FTA.

56 Often cases will arise where the claim relies on both sections 108 and 109 (or just section 108), as well as section 159 of the FTA. In such circumstances it will usually be convenient for the tribunal to focus upon the broader powers in sections 108 and 109 (or just section 108) than concern itself with whether there has been a contravention of the FTA that would form the basis of relief under section 159. Indeed, this is such a case. The tribunal may make any order it considers fair, including an order that the money paid by Mrs Law be refunded. This being so, it is unnecessary to determine whether or not MCI has contravened specific provisions of the FTA, such as provisions relating to telephone marketing agreements, or unconscionable conduct, or misleading or deceptive conduct.

57 Having considered all the evidence, I conclude that it is fair that the transaction between Mrs Law and MCI be reversed: that is, that the money be refunded and the goods returned.

58 The nature of the transaction between the parties was such that it had many similarities to a telephone marketing agreement as defined in section 67A of the FTA. Hence the de facto imposition of a cooling off period - during which time the purchaser may change their mind - might be thought to be appropriate as a matter of fairness in trade and commerce in the context of a purchase made after a cold call to a domestic customer. But this is not the only reason for my conclusion.

59 It is relevant that the purchase made by Mrs Law on 3 August 2005 was not just the result of an unprompted telephone call, but followed eight such calls. Some of these repeat calls were justified, as Mrs Law sought further information and expressed interest in the share trading software. But in determining whether it is fair for a purchaser to change their mind and obtain a refund one relevant factor will be the extent to which the supplier hounded them or, to put it more kindly, seduced them into submission. It needs to be emphasised that Mrs Law emphatically rejected the initial advance made by MCI - yet MCI came back and had a second try. The facts have some of the elements of wearing down the customer.

60 A further relevant factor is the selling strategy that was adopted by MCI. The first part of this strategy was to maintain that the price of the software was $8,900, whereas it could be purchased with a down payment of only $5,900. The "special" nature of the offer was underscored by a statement in the MCI letter of 15 June 2005 that the offer was "strictly limited" and would only last seven days. Both of these propositions seem inherently unlikely.[25] The subsequent offer made to Mrs Law - to the effect that the software could be bought with a down payment of $3,000 - further demonstrates that the initial offer which was "strictly limited" and "only lasted seven days" was neither of these things. In turn, the revised "special offer" of $3,000 was said to be available only to the first 100 purchasers. Further, when she was called on 3 August 2005 Mrs Law was told that this special offer would expire on that day. Whether or not this strategy amounts to a high pressure strategy is unnecessary to determine. However I have no doubt that the strategy was intended to, and did, build pressure on Mrs Law to agree to purchase the software. Further, I find that the strategy was disingenuous. Neither of the offers were truly limited in the way MCI represented.

61 A further relevant factor in forming my conclusion is the short time that passed between the receipt of the software and Mrs Law indicating that she wished to seek a refund. Further, during this time, I find that Mrs Law did not use the software. The essential nature of the transaction between the parties involved a bargain about the use of intellectual property. It did not so much relate to payment to compensate for the marginal cost of producing the software which was supplied (together with an element of profit). In such circumstances it seems highly relevant that a person did not actually take advantage of the intellectual property. The fact that the software package was opened is not to the point. Whilst it might technically trigger some form of contractual obligation, it has little bearing on what is fair if the software was not actually used.

62 A further consideration which informs my conclusion is the nature of the product which MCI persuaded Mrs Law to purchase. It is notorious that share trading, unlike share investing, is a risky and uncertain endeavour. It has been described as a zero sum game: that is, for every winner there will be a loser.[26] Share traders seek to buy cheap and sell dear. But for every buyer, buying cheap, there will be a seller; and for every seller, selling dear, there will be a buyer. The market is replete with full-time professional traders, with sophisticated software and huge resources. No doubt some amateurs may be able to make handsome profits from trading shares, whether or not using MCI software, but it seems inherently unlikely that this could be consistently achieved by a complete amateur in less than 20 minutes per day. Rather it is likely that successful share trading depends upon a substantial understanding of the share market. Even if successful share trading is enhanced by software such as the Star Trader software, it is apparent from reading the manual accompanying the software package that considerable knowledge and skill is required to "drive" the software. Most ordinary people contacted cold over the phone will not have, nor be able to easily acquire, such knowledge and skill.

63 Given the various factors I have set out, I think it is fair to allow a person in Mrs Law's position to change her mind, before using the software, and to obtain a refund. In turn she should return the software package to MCI.

64 In reaching my conclusion I have not relied upon any of the representations made by MCI after Mrs Law requested a refund. However I am concerned about MCI's repeated references to "Justice Hogan Doran". It is important that major companies avoid deceptive conduct, even if unintentional.

The claim for a refund concerning share trading data

65 I am not persuaded that it would be fair to order the refund of the sum of $32.30 which Mrs Law paid MCI to acquire share trading data. This sum was not paid in response to a telephone marketing initiative; nor was it paid in a context which was unfair. Share trading data is in the nature of a consumable. Hence the fact that the data was not utilised cannot be determinative.

[1] See clause 28AA of Schedule 1 of the Victorian Civil and Administrative Tribunal Act 1998 and sections 107 and 107A of the FTA.

[2] See clause 28BB and 28GG of Schedule 1 of the Victorian Civil and Administrative Tribunal Act 1998.

[3] See Winn v Blueprint Instant Printing Pty Ltd [2002] VSC 295 per Byrne J.

[4] I note that this book that is available for purchase on-line at Wrightbooks for $24.95.

[5] [2004] NSWSC 733.

[6] Section 7 of the FTA.

[8] In addition to these specific provisions, the FTA makes general provisions in relation to the enforcement of the FTA and in relation to remedies and legal proceedings.

[9] Section 108(1) of the FTA. This was described in an earlier version of the FTA as a "fair trading dispute". The Court of Appeal of the Supreme Court of Victoria considered this earlier provision in Zeus and Ra Pty Ltd v Nicolaou [2003] VSCA 11 and Sigma Constructions (Vic) Pty Ltd v Maryvell Investments Pty Ltd [2004] VSCA 242. There may be some sense in changing the current descriptor to a "purchaser and supplier dispute".

[10] Section 107(1) of the FTA.

[11] See section 107(2) and (3) of the FTA.

[12] See section 109(4) of the FTA.

[13] This is a summary of the definitions contained in section 109(4) of the FTA. It is not intended to fully analyse these definitions.

[14] [1975] VicRp 91; [1975] VR 949, especially at 955.

[15] See Union Steamship Company of Australia Pty Ltd v King [1988] HCA 55; (1988) 166 CLR 1.

[16] [2004] NSWSC 733.

[17] Although the terms of the New South Wales Consumer Claims Act differ from section 107 of the (Victorian) FTA, both provisions turn on the "supply" of goods or services.

[18] This is a summary of section 67H and does not purport to be a full statement of the effect of the section.

[21] Incidentally, it is also a "small claim" as it involves an amount of less than $10,000, but nothing turns on this in the present context.

[22] The application lodged by Mrs Law values her claim at $3,032.30 and asks VCAT to order the payment of money, the return of goods and the cancellation of a contract. The fact that the money claimed is in the nature of a refund does not make the claim one which is not for the payment of money.

[23] As defined in section 109(4) of the FTA.

[24] As defined in section 107(1) of the FTA.

[25] According to the annual report of Tomato Technologies Limited for the year 2004-05 approximately 3,400 units of software were sold within Australia producing revenue of $12.5 million. This would indicate a mean price of per unit of software sold of $3,676.

[26] Arguably it is a minus sum game, as for every trade there is a commission to be paid to a broker.