Plaintiff v Defendants

Plaintiff v Defendants - [2007] VSC 542 - VSC 2007 case summary — Zoe

[98]

38 It is important not to approach the FTA as though through the somewhat narrower eye of a private cause of action at law. The FTA is concerned with the protection of the public interest in the area of its operation. The provisions in Part 2 of the FTA, and in particular s 9, s 12 and s 19, like the equivalent provisions in the TPA, establish a statutory norm of conduct to be observed by persons engaged in trade or commerce[14]. A failure by a person, in trade or commerce, to act in accordance with a particular statutory norm of conduct does not in itself confer upon another party a cause of action in the sense customarily used in referring to a private cause of action at law. For instance, all that is established when a person in trade or commerce engages in conduct that is misleading or deceptive or likely to mislead or deceive is that the statutory norm of conduct has been contravened. That in itself does not create a liability in that person or confer a right of action against that person in favour of any other person. The approach taken in the provisions of the TPA equivalent to those in Part 2 of the FTA is to provide for the consequences of failure to comply with a norm of conduct in a later Part of the statute. With the exception of the provision for penalties in s 12 and s 19 and a number of other provisions in Part 2 of the FTA, the same approach is taken in the FTA. Notwithstanding this approach of including penalties in certain sections in Part 2 of the FTA, it is clear that s 12 and s 19 (to mention only those provisions in Part 2) prescribe a norm of conduct for the purpose of protecting consumers. The provision for penalties in those sections, indeed in many sections in Part 2, does not alter that as being the correct understanding of the purpose and intendment of the provisions. The inclusion of the provision for penalty in a number of sections in Part 2 may be regarded as a convenience of legislative drafting, which also serves to emphasise the importance and seriousness of observance of the statutory norm of conduct.

[124]

49 I refused to admit, and struck a line through, much of Purvis's response to the complainants. The basic problem was that he had not been involved in any of the subject transactions. Nevertheless, unrestrained by the restrictions of the rules of evidence the observance of which would have greatly limited the scope of any evidence he could have given in chief, he proceeded to give evidence of the contents of patient records without producing the records, to give evidence in the nature of commentary, and argumentative in nature, on the subject complainants' evidence and to use the Procedure Manual in this process on the assumption that Merringtons employees had acted in accordance with it, but without any employee concerned providing an affidavit as to the truth or otherwise of the evidence of the complainants as to what was said and done in the course of the subject transaction. Moreover, there was a studied failure to state in relation to each complainant why the relevant member or members of staff had not provided affidavits. Purvis referred to the existence of patient records but did not disclose whether in any and which of the complainants' transactions the relevant employee could or could not be identified, and if so naming that person, or disclose the efforts (if any) made to have that person give evidence and why (in each case) those efforts were unsuccessful. Such evidence might have gone to explain why Purvis came to swear the affidavit he did. But even then it would not explain the inclusion of a vast amount of inadmissible material in his affidavit. The conclusion reasonably to be drawn, and that which I do draw, particularly in combination with the failure to answer any of the Director's further affidavits and the decision not to cross-examine, is that the defendants determined not to have employees give evidence but for better or worse to chance their arm with the Purvis affidavit. Of course conducting the defence in this way circumscribed any practical ability to cross-examine the complainants as their evidence had not been put in issue by affidavits of employees of the defendants.

[151]

72 In his initial affidavit sworn in February 2006 Southgate expressed his opinions on those matters. Before referring to this evidence I interpolate a reference to certain evidence in his second affidavit sworn on 25 October 2007. That is that Purvis, whose qualifications Purvis had stated in his affidavit, is a clinical dispenser, not an optometrist. Southgate stated that in his opinion a clinical dispenser does not necessarily have the clinical training and expertise to comment on what is appropriate optometric practice, whether or not they work alongside optometrists. I note that Purvis provided no evidence in answer to this whether by elucidation of his experience or otherwise. Nor, as mentioned, did the defendants' counsel cross-examine Southgate on his evidence with a view to finding support for Purvis as possessing suitable experience to enable him to give opinion evidence. I note that Southgate's evidence allows the possibility that a clinical dispenser may have the clinical training and expertise to comment on what is appropriate optometric practice. As Purvis was not cross-examined on his qualifications and experience it is difficult to make a finding as to his qualification to provide opinion evidence on matters of optometric practice. In my opinion, in the circumstances, that difficulty is properly resolved by preferring the evidence of Southgate wherever it is in conflict with evidence of Purvis. I do so not merely because I accept Southgate's evidence but also because in my view Purvis's evidence is to be regarded with the greatest circumspection having regard to his role as a senior employee of the defendants arguing against the Director's case and seeking dismissal of the proceeding, also having regard to the matters discussed above concerning his affidavit, and by reason of doubt as to his qualification to give opinion evidence as to optometric practice. I accept Southgate as an appropriately qualified expert and prefer his evidence to that of Purvis wherever there is conflict with the latter.

[152]

73 Returning then to the evidence of Southgate in his initial affidavit he said this as to the checking processes reasonably to be expected of an optometrist when a patient complains about the appropriateness of their spectacles. As to proper and reasonable practice, Southgate said that before patients are notified that their spectacles are ready for collection, the spectacles should be checked by a suitably qualified person to verify that they are made up as prescribed and ordered. That would usually be an optical dispenser, but could also be an optometrist. For a variety of reasons it is not uncommon for patients collecting new spectacles to express concern as to whether they are completely correct and suitable for them. This may be especially the case, for example, if they are wearing spectacles for the first time or where there is a large change in prescription or a different lens design such as a multifocal instead of single vision. Where patients express concern as to whether their new spectacles are suitable for them at the time of delivery, it is reasonable to expect that the optometrist or dispenser delivering the spectacles re-check at that time whether they have been made up correctly as prescribed and ordered. That should take no more than 5-10 minutes and involve measuring the lens power on a vertometer, marking the optical centres and checking the interpupillary distance as well as any prism. In the case of multifocal and bifocal lenses, the position of the reading section of the lens, especially its height in the frame, should also be checked. The frame should also be checked to ensure that it is straight before being adjusted to the patient's face. He noted that Adams, Chandler, Cochrane, Mann and Patterson expressed concern when collecting their new spectacles, and that Carlow stated that she was not given the opportunity of trying her new spectacles when collecting them. He noted that only Cochrane recalled having had the spectacles re-checked at delivery, Mann stating that that procedure was not performed. Southgate said that it was possible that re-checking of spectacles occurred without the patients knowing or mentioning it in their affidavit. For example Chandler recalled the Merringtons sales assistant stating that "the lenses were made in accordance with Dr Workman's prescription" from which one might infer and hope that the assistant had checked the spectacles first, but one could not be certain that that was the case.

[157]

78 Finally he referred to the problem that Collinson had with the multicoating of the spectacles lenses. Special lens coatings are available to enhance the visual performance and durability of spectacles lenses. Multicoating is frequently used to reduce reflection and therefore increase the transmission of light through lenses which results in better quality vision (especially at night-time), reduces lens reflections and improves cosmesis as the lenses become less visible in the frame. They also increase the scratch-resistance and therefore the durability of lenses. The multicoat is applied to the lens after it has been ground. Once the lens has been used, however, the multicoat cannot be ground or polished off the lens, nor can a multicoat be applied or re-applied to lenses that have already been cut to the shape of a frame used and undergone even slight amounts of wear. A consequence of this is that once a multicoat becomes crazed or defective the underlying lens is effectively rendered useless and must be replaced. Southgate considered that 12 months was an absolute minimum expectation for the life of a lens multicoating. It is more common for retail optical dispensers to provide a two year warranty for multicoatings, at least partially because this is supported by the lens laboratories, so two years could also be regarded as a reasonable period for lens multicoatings to last. Southgate considered that should a multicoat fail to last 12 months it is incumbent on the retail supplier of the lens to make an arrangement with the patient to replace the whole lens at a significantly reduced cost, possibly even (but not necessarily) at no charge. As to this Collinson found that the multicoat applied to his multifocal spectacles lenses began to peel severely within 10 months of purchase and that he presented to Merringtons 13 months after purchase, but Merringtons were not prepared to repair or replace the lens or provide a refund. Southgate was of the opinion that the absence of any effort or offer on Merringtons' part was less than reasonable.

[218]

Merringtons and/or Merringtons Optometrists, in trade or commerce, in connexion with the supply or promotion of the supply of goods, namely, prescription spectacles or contact lenses, has or have made a false or misleading representation concerning the existence, exclusion, or effect of a condition, warranty, right or remedy in contravention of s 12(k) of the Act by making to customers of Merringtons and/or Merringtons Optometrists a representation that those customers were not entitled to a refund regarding their purchase of prescription spectacles or contact lenses whereas those customers were and are entitled to refunds because the prescription spectacles supplied by Merringtons and/or Merringtons Optometrists to those customers were not fit for their purpose and/or the customers had lawfully repudiated their contracts with Merringtons and/or Merringtons Optometrists.
1. F. Merringtons and/or Merringtons Optometrists, in trade or commerce, in connexion with the supply, possibly supply or promotion of the supply of goods, namely, prescription spectacles or contact lenses, has or have made a false or misleading representation concerning the existence, exclusion, or effect of a condition, warranty, right or remedy in contravention of s 12(k) of the Act by making to customers of Merringtons and/or Merringtons Optometrists a representation that those customers were required to produce and surrender their original receipts as proof of purchase or as a condition of Merringtons and/or Merringtons Optometrists considering whether or not to pay a refund to those customers regarding their purchase of prescription spectacles or contact lenses whereas those customers were and are entitled to prove their purchase from Merringtons and/or Merringtons Optometrists by means other than production and surrender of the original receipts.
2. G. Merringtons and/or Merringtons Optometrists, in trade or commerce, in connexion with the supply, possible supply or promotion of the supply of goods, namely, prescription spectacles or contact lenses, has or have made a representation that was false, misleading or deceptive in a material particular in contravention of s 12(n) of the Act by making to customers of Merringtons and/or Merringtons Optometrists a representation that those customers were required to produce and surrender their original receipts as proof of purchase or as a condition of Merringtons and/or Merringtons Optometrists considering whether or not to pay a refund to those customers regarding their purchase of prescription spectacles or contact lenses whereas those customers were and are entitled to prove their purchase from Merringtons and/or Merringtons Optometrists by means other than production and surrender of the original receipts.
3. H. Merringtons and/or Merringtons Optometrists, in trade or commerce, in connexion with the supply, possible supply or promotion of the supply of goods, namely, prescription spectacles, has or have made a false or misleading representation about the production, preparation or supply of the prescription spectacles in contravention of s 12(1) of the Act by making to customers of Merringtons and/or Merringtons Optometrists representations that spectacles for those customers would be ready in accordance with the customers' order within a specified period when in fact such spectacles were not ready within the specified period or any reasonable timeframe.
4. I. Merringtons and/or Merringtons Optometrists, in trade or commerce, in connexion with the supply, possible supply or promotion of the supply of goods, namely, prescription spectacles, has or have made a representation that was false, misleading, or deceptive in a material particular, namely, the time within which the prescription spectacles would be ready for collection by the customer, in contravention of s 12(n) of the Act by making to customers of Merringtons and/or Merringtons Optometrists representations that the spectacles for those customers would be ready in accordance with the customers' order within a specified period when in fact such spectacles were not ready within the specified period or in any reasonable timeframe.

[224]

120 The relevant facts and circumstances are these. According to Purvis, Merringtons Pty Ltd provides optometry services such as eye examinations. It is not in the business of selling spectacles, contact lenses, sunglasses etc. On the other hand, in its business Merringtons Optometrists deals in optical products such as the sale of spectacles, contact lenses and sunglasses etc and also in the manufacture and wholesaling of optical products. It is evident that the Merringtons shops attended by the complainants provided both such optometry and product sale services, which indicates that each company conducted business through the shops. Then, the head office of both companies was at premises in Tullamarine from which Merringtons Optometrists also conducts its importing, manufacturing and wholesaling operations. Purvis said that the defendants conducted business from retail outlets operated by them throughout Australia, including 22 in Victoria which he referred to as "practice premises". Purvis further said that in the conduct of its business Merringtons Optometrists retains a staff of approximately 195 across these 22 practice premises, the staff including optometrists, optical dispensers, optical mechanics and trainees. He did not say whether Merringtons Pty Ltd retained staff at these practice premises. I do not know whether that silence means that the optometrist members of staff are retained or employed by Merringtons Optometrists notwithstanding that the business of Merringtons Pty Ltd is the provision of optometry services. Precisely how and why this might be so (if it is) was not explained. It might be of course that there is an agreement between the companies which regulates matters relating to the employment and arrangements for staff and the conduct of the practices including such matters as the entity which is the employer, the terms on which the staff are engaged in relation to their services being available for each company and liability for staff wages and expenses. Such matters could not be known to the complainants as members of the public who attended at a Merringtons shop.

[225]

121 In their affidavits the complainants said that they attended at "a Merringtons store" or "Merringtons" (for example Adams), or "Merringtons or Merringtons Optometrists" (for example Brewer), or just "Merringtons" (for example Carlow), or "Merringtons Pty Ltd" and "Merringtons" (for example Gal). The description of the shop as a Merringtons store is understandable for when the complainants attended at a Merringtons practice premises there was nothing to distinguish between Merringtons Pty Ltd and Merringtons Optometrists let alone to identify that there were two such distinct entities conducting business at the practice. It was all presented as Merringtons, both in terms of the physical presentation of the premises and the internal provision of services. There was no distinction between the staff, from the optometrist who conducted the eye examination to the staff at the counter, in terms of they being employed by either company. Accepting, as I do, that Merringtons Pty Ltd and Merringtons Optometrists both conducted business at the practice premises it is evident, and in my view is reasonably to be taken, that the staff acted for and represented both businesses in the provision of services in the practices. But to the customers there was no indication that the services they received may have involved two companies. That of course may not be unusual as a business may be operated under a complex ownership and administrative structure that is not known to a customer of the business. As I have said, the nature and terms of the business structure were not fully disclosed by Purvis, and they never were disclosed to the complainants. What is known in this case, because it is the conclusion reasonably to be drawn on the evidence, is that the operating structure adopted was that the companies conducted their businesses through the common front of a Merringtons shop or "practice premises" and that the staff acted for and represented each. To all external appearances it was one business called Merringtons.

[242]

138 As clearly as contraventions of the FTA are established in respect of Adams and Trenton, contraventions are also established as alleged by the plaintiff in respect of the other complainants. As mentioned earlier there were differences in the circumstances pertaining to the complainants. One or another factor present in the case of one or more complainants was not present in the case of another or other complainants. In the case of Chandler, for instance, there is no evidence of a representation as to when his spectacles would be ready or that Merringtons requested his original receipt in relation to his request for a refund. But the facts otherwise bespeak manifest failure to provide spectacles fit for his use (in his case in contravention of s 32IA of the FTA) and establish circumstances within declarations B, C, E, R and S. Then, in the case of Collinson, the problem was the premature peeling of the coating on the multifocal reading/driving spectacles. The premature failing of the coating constituted a failure to provide Collinson with spectacles fit for purpose in accordance with the term implied by the Goods Act and also in contravention of s 19(1)(b) of the FTA, and establish circumstances within declarations C, E and V. In another case, that of Herbert, spectacles were never provided and thus there was no issue of trialling spectacles as Herbert cancelled the order and requested a refund of her $50 deposit on account of Merringtons' failure to provide the spectacles within the represented time of seven days or a reasonable time thereafter. In the circumstance that she was required to provide her original receipt as a condition of considering her request for a refund, her case falls within declarations A, C, D, F, G, H, I and Z. In another case again, that of Jemmeson, Merringtons failed to refund $156 being the amount charged to him for supplying spectacles with photochromic lenses, which Jemmeson had not ordered and which Merringtons took back and replaced; the case falls within declarations C and AA.

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