NEWS

Jurisdictional surprises in the Competition and Consumer Act

The introduction of the Competition and Consumer Act contains a number of new provisions that did not exist in the Trade Practices Act – some of which modify the rules on which the Court has the power to exercise jurisdiction over Australian Consumer Law claims.

There was little doubt that most claims against corporations falling within the “consumer protection” and “product liability” (collectively, Consumer Protection Claims) provisions of the Trade Practices Act 1974 (Cth) (TPA) could be instituted in the Federal or State courts.

This meant that claims for damages or compensation arising from misleading and deceptive conduct, unconscionable conduct, and/or defective products could be made in a wide variety of courts. It really was a matter for the lawyer and the client to consider which jurisdiction would be most appropriate (see sections 86 and 75AS of the TPA).

Whilst the aim of the Competition and Consumer Act 2010 (Cth) (CCA) was to harmonise pre-existing legislation surrounding Consumer Protection Claims, in doing so, the CCA introduced a number of new provisions that did not have any predecessor in the TPA.

The effect of some of these new provisions (see sections 138 to 138B of the CCA) was to confer exclusive jurisdiction on the Federal Court or Federal Circuit Court (subject to the value of the claim) to deal with the following Consumer Protection Claims (by expressly excluding the jurisdiction of State and Territory courts in respect of these claims) (Defect and Pyramid Claims):

  • any matter arising under Division 2, Part 3-1 of Schedule 2 of the CCA (pyramid schemes); or
  • Part 3-5 of Schedule 2 of the CCA (liability of manufacturers for goods with safety defects).

Commencing a Defect or Pyramid Claim in a State or Territory court may:

  • result in the claim being struck out for lack of jurisdiction (including, at worst, being struck out after a relevant limitation period has expired),
  • if unchecked, lead to a judgment that is ultra vires, and
  • be an embarrassing and costly mistake.

To that end, if a Defect or Pyramid Claim comes along – think Federal.

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