unconscionable conduct in breach of the Trade Practices Act 1974

A case so similar to the Freo Market issues I just had to print it. The days of greedy landlords and the lack of ethical behaviour and bullying tactics are over. People are fighting back and winning!

Federal Court finds retail landlord's conduct unconscionable.

The Federal Court has ordered a Melbourne retail landlord to compensate four tenants after it engaged in unconscionable, misleading and deceptive conduct.
In a victory for the small business operators, the court declared Dukemaster Pty Ltd engaged in unconscionable conduct, misleading and deceptive conduct and made false representations.

The court also declared Dukemaster's general manager of the Paramount Centre, Ms Patricia Wong, was involved in Dukemaster's contravening conduct.

The ACCC alleged Dukemaster, which is a landlord of retail outlets in the Paramount Centre (Bourke Street), engaged in unconscionable conduct in breach of the Trade Practices Act 1974 by taking unfair advantage of its stronger bargaining position, exerting undue pressure and using unfair tactics against four tenants in connection with their leases.

The ACCC also alleged Dukemaster represented to these tenants that it believed rental it proposed was very reasonable and below the market value when in fact this was not the case and that the company did not have a reasonable basis for such a belief.

ACCC Chairman, Mr Graeme Samuel, said the case demonstrated the ACCC's resolve to vigorously protect the interests of small business operators simply unable to stand up to the unconscionable conduct of a party in a superior bargaining position.
The court's declaration of unconscionable conduct by Dukemaster in respect of the four tenants was largely made against a backdrop involving:
small business owners who had no or little ability to speak or read English and Dukemaster's knowledge of that fact;
a proposed rental which was represented by Dukemaster as being reasonable and below market value when this was not the case and where there was no basis for Dukemaster to seek the amount stated;
Dukemaster imposing, without justification or explanation, a very short time frame for the tenants to respond to the proposed rental (often a matter of days was sought and, in one instance, when independent advice was not readily available);
Dukemaster's ongoing failure to comply with Victorian retail leasing legislation; and
Dukemaster threatening to evict or sending letters of demand to certain tenants.

In relation to her finding of unconscionable conduct by Dukemaster against one tenant, Justice Michelle Gordon stated that what had occurred was not a negotiation but an ultimatum and that the tenant had no choice but to accept the rental amount Dukemaster proposed.

Later in her judgment the judge observed in relation to the same tenant that, '…the actions of Dukemaster were deliberate (or at least reckless), showed no regard for conscience and were irreconcilable with what is right or reasonable.' She made similar observations in relation to other tenants.

In addition to the declarations of contravention of the Act, the court made orders including:
injunctions which restrain Dukemaster for a period of three years from engaging in similar conduct; and an order that Dukemaster and Ms Wong pay compensation to the tenants in excess of $275,000 for their loss and damage suffered as a result of the contravening conduct.
The ACCC's proceeding which involved a representative action for four tenants affected by the conduct of their landlord required in effect four separate cases to be run in the one proceeding. The court had to undertake a separate analysis of Dukemaster's contravening conduct in respect of each represented party.

"The approach that had to be taken in this case underscores the fact that the concept of unconscionable conduct is not capable of any easy or ready definition," Mr Samuel said.
The Trade Practices Act 1974 prohibits conduct that is unconscionable 'in all the circumstances' and provides, in effect, that the court may have regard to any relevant matter it thinks fit in forming a view as to whether the conduct is unconscionable.
Mr Samuel said this case served as a further warning that the ACCC would not tolerate conduct which it considers unconscionable.

Recently the ACCC was also successful in another court action on unconscionable conduct, against Craftmatic Australia Pty Ltd which involved the use of unfair pressure tactics on vulnerable citizens.

The ACCC's action in the Dukemaster case followed an investigation which commenced as a result of a referral from the Small Business Commissioner, Victoria.

http://www.accc.gov.au/content/index.phtml/itemId/878829