FEDERAL COURT OF AUSTRALIA

Australian Competition and Consumer Commission v Lux Distributors Pty Ltd [2013] FCA 47

THE COURT ORDERS THAT:

1.    The application be dismissed.

2.    The applicant pay the respondent’s costs.

3.    The operation of the previous order be stayed for 14 days, during which period the parties have liberty to apply on the question of costs.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

1    In this proceeding, the applicant, Australian Competition and Consumer Commission, seeks declarations, penalties and injunctions in respect of allegations that the respondent, Lux Distributors Pty Ltd, engaged in conduct that was, in all the circumstances, unconscionable in breach of s 51AB of the Trade Practices Act 1974 (Cth) (“the TP Act”) and s 21 of Sched 2 – “The Australian Consumer Law” – (“the AC Law”) to the Competition and Consumer Act 2010 (Cth). The respondent, a trading corporation within the meaning of the TP Act, carries on business, in trade or commerce, as a supplier of the “Lux” range of domestic vacuum cleaners. The applicant’s allegations relate to the sale, or provisional sale, of vacuum cleaners to five elderly women at their homes on various dates, the earliest of which was 9 April 2009, and the latest of which was 5 July 2011.

2    So far as is relevant in this case, the method employed by the respondent to make sales of its vacuum cleaners was broadly in accordance with the following. Using either its existing customer database (developed, for example, from previous sales) or the telephone directory, a member of the respondent’s staff would make a telephone call to a householder. The terms of the calls that were made in the present case were the subject of only very general evidence by the householders concerned, and were the subject of no evidence from the respondent’s staff member, or staff members, who made the calls. However, in evidence was a copy of the script which those staff members were instructed by the respondent to follow when making these calls.

3    That script commenced as follows:

Hi, is Mr or Mrs XXXXX there please?

Great!

Hi Mr(s) XXXXX, my name is ##### and I’m calling on behalf of Lux Distributors, we look after all the Lux vacuum cleaners.

How are you today Mr(s) XXXXX?

<Respond to their response>

NOW,

The main reason for my call today is we have someone in your area tomorrow giving a FREE maintenance check to all vacuum cleaners. What kind of cleaner do you use?

<Wait for them to answer>

Fantastic, now what would be the best time for us to check it for you, XXam or XXpm?

As will be apparent, the indication given to the householder was that a representative of the respondent would call by for the purpose of making “a free maintenance check” on the householder’s existing vacuum cleaner. After the passage set out above, the script then dealt with various alternative courses that the conversation might take, in the event that the householder responded in ways which were negative, discouraging or indifferent. There is no need to refer to them here, since there is nothing in the evidence in the present case upon which I could find that any of the conversations upon which the applicant relies took a course that would make one or more of these alternative passages in the script relevant. For the moment, it will be sufficient to say that each of the five elderly women whose circumstances are relevant did agree to have a representative of the respondent call at her home for the purpose of carrying out a free maintenance check on her existing vacuum cleaner.

4    The respondent’s representatives who called by the homes of householders pursuant to telephone calls of the kind referred to were in all but name sales agents for the respondent’s products. They were remunerated only by commission, earned in the form of the margin between what was effectively a wholesale price determined by the respondent and the price at which they were successful in selling a vacuum cleaner to a particular householder. Further, they used their own vehicles for these sales, and covered all of their own costs. In making a visit arranged by the respondent, the representative would examine the householder’s existing vacuum cleaner, would, in some (but not all) cases, conduct a test which compared that vacuum cleaner with a near-new demonstration model, and would use the results of the demonstration, and presumably such powers of personal persuasion as were appropriate in the circumstances, to prevail upon the householder to replace his or her existing vacuum cleaner with a new Lux model.

5    The sales to three of the five householders involved in the present case were made at times which made s 51AB of the TP Act relevant. It is necessary to note only the terms of subss (1) and (2) of that section, which were as follows:

(1)    A corporation shall not, in trade or commerce, in connection with the supply or possible supply of goods or services to a person, engage in conduct that is, in all the circumstances, unconscionable.

(2)    Without in any way limiting the matters to which the Court may have regard for the purpose of determining whether a corporation has contravened subsection (1) in connection with the supply or possible supply of goods or services to a person (in this subsection referred to as the consumer), the Court may have regard to:

(a)    the relative strengths of the bargaining positions of the corporation and the consumer;

(b)    whether, as a result of conduct engaged in by the corporation, the consumer was required to comply with conditions that were not reasonably necessary for the protection of the legitimate interests of the corporation;

(c)    whether the consumer was able to understand any documents relating to the supply or possible supply of the goods or services;

(d)    whether any undue influence or pressure was exerted on, or any unfair tactics were used against, the consumer or a person acting on behalf of the consumer by the corporation or a person acting on behalf of the corporation in relation to the supply or possible supply of the goods or services; and

(e)    the amount for which, and the circumstances under which, the consumer could have acquired identical or equivalent goods or services from a person other than the corporation.

The sales to the fourth and fifth householders were made after the commencement of the AC Law, the relevant provisions of s 21 of which were relevantly indistinguishable from those of s 51AB of the TP Act set out above.

6    Although s 51AB(2) of the TP Act permitted the court to have regard to certain identified circumstances for the purpose of determining whether a corporation had engaged in unconscionable conduct, it provided no further guidance on the standard or degree of reprehensibility, as it were, that was involved in the concept of unconscionability as deployed in subs (1) of the section. The provision, and the relevantly indistinguishable terms of s 51AC(1) of the TP Act, have, however, been the subject of a number of elaborations by the courts over the years, and it is useful next to refer to those of them that appear to provide guidance which is most applicable to the circumstances of the present case.

7    In Hurley v McDonald’s Australia Ltd [1999] FCA 1728, the Full Court said (at [22]):

For conduct to be regarded as unconscionable, serious misconduct or something clearly unfair or unreasonable, must be demonstrated – Cameron v Qantas Airways Ltd (1994) 55 FCR 147 at 179. Whatever “unconscionable” means in s 51AB and s 51AC, the term carries the meaning given by the Shorter Oxford English Dictionary, namely, actions showing no regard for conscience, or that are irreconcilable with what is right or reasonable – Qantas Airways Ltd v Cameron (1996) 66 FCR 246 at 262. The various synonyms used in relation to the term “unconscionable” import a pejorative moral judgment – Qantas Airways Ltd v Cameron (1996) 66 FCR 246 at 283-284 and 298.

                                [their Honours’ emphasis]

8    In Australian Competition and Consumer Commission v Allphones Retail Pty Ltd (2009) 253 ALR 324, Foster J said (at 346-347 [113]):

There is a body of authority in this court which establishes the following propositions:

(a)    The scope of s 51AC is wider than that of s 51AA. The meaning of unconscionable for the purposes of s 51AC is not limited to the meaning of the word according to established principles of common law and equity: per French J in Australian Competition and Consumer Commission v C G Berbatis Holdings Pty Ltd (No 2) (2000) 96 FCR 491 … per Sundberg J in Australian Competition and Consumer Commissioner [sic] v Simply No-Knead Franchising Pty Ltd (2000) 104 FCR 253 … per Selway J in Australian Competition and Consumer Commission v 4WD Systems Pty Ltd (2003) 200 ALR 491 … and per Jacobson J in Pacific National (ACT) Ltd v Queensland Rail … [2006] FCA 91 at [918] and [931].

(b)    The ordinary or dictionary meaning of unconscionable, which involves notions of serious misconduct or something which is clearly unfair or unreasonable, is picked up by the use of the word in s 51AC. When used in that section, the expression requires that the actions of the alleged contravenor show no regard for conscience, and be irreconcilable with what is right or reasonable. Inevitably the expression imports a pejorative moral judgment: per Heerey, Drummond and Emmett JJ in Hurley v McDonalds Australia Ltd … [1999] FCA 1728 at [22] and [29]. This helpful articulation of the meaning of the word when used in s 51AC was followed by Selway J in Australian Competition & Consumer Commission v 4WD Systems Pty Ltd (2003) 200 ALR 491 … and by Sundberg J in Australian Competition and Consumer Commission v Simply No-Knead Franchising Pty Ltd (2000) 104 FCR 253 … ; and

(c)    Normally, some moral fault or moral responsibility would be involved. This would not ordinarily be present if the critical actions are merely negligent. There would ordinarily need to be a deliberate (in the sense of intentional) act or at least a reckless act: per Selway J in 4WD Systems at [185].

9    In Tonto Home Loans Australia Pty Ltd v Tavares [2011] NSWCA 389, Allsop P said, with the assent of the other members of the NSW Court of Appeal (at [291]):

Aspects of the content of the word “unconscionable” include the following: the conduct must demonstrate a high level of moral obloquy on the part of the person said to have acted unconscionably: Attorney General (NSW) v World Best Holdings Ltd (2005) … 63 NSWLR 557 at 583 [121]; the conduct must be irreconcilable with what is right or reasonable: Australian Securities and Investments Commission v National Exchange Pty Ltd (2005) …148 FCR 132 at 140 [30]; Australian Competition and Consumer Commission v Samton Holdings Pty Ltd (2002) … 117 FCR 301 at 316–317 [44]; Qantas Airways Ltd v Cameron (1996) 66 FCR 246 at 262; factors similar to those that are relevant to the CRA are relevant: Spina v Permanent Custodians Ltd [2009] NSWCA 206 at [124]; the concept of unconscionable in this context is wider than the general law and the provisions are intended to build on and not be constrained by cases at general law and equity: National Exchange at 140 [30]; the statutory provisions focus on the conduct of the person said to have acted unconscionably: National Exchange at 143 [44]. It is neither possible nor desirable to provide a comprehensive definition. The range of conduct is wide and can include bullying and thuggish behaviour, undue pressure and unfair tactics, taking advantage of vulnerability or lack of understanding, trickery or misleading conduct. A finding requires an examination of all the circumstances.

In the same case, his Honour also said (at [293]):

Spigelman CJ in World Best Holdings at 583 [121] referred to a “high level” of moral obloquy. Whether that is too stringent and whether “significant” or “real” may be preferable need not be decided. What is required is some degree of moral tainting in the transaction of a kind that permits the opprobrium of unconscionability to characterise the conduct of the party.

10    In Director of Consumer Affairs Victoria v Scully (No 3) [2012] VSC 444, Hargrave J said (at [26]-[31]):

26.    The cases concerning the content of statutory unconscionability disclose a consistent requirement that the relevant conduct must include a significant element of moral obloquy. It is not enough that the conduct is objectively unfair, unjust, wrong or unreasonable.

27.    In Qantas Airways Ltd v Cameron (1996) 66 FCR 246 at 283-4 and 298, the Full Court of the Federal Court referred to the term “unconscionable” as importing “a pejorative moral judgment” (at 283–4, 298). This approach was affirmed by another Full Court in Hurley v McDonald’s Australia (2000) ATPR 41-741 at [22].

28.    In Attorney-General (NSW) v World Best Holdings Ltd (2005) 63 NSWLR 557, the New South Wales Court of Appeal made similar statements. Spigelman CJ (Mason P and Tobias JA agreeing) stated that statutory unconscionability, while intended to extend the equitable concept of unconscionability, does not extend the concept so far as to include conduct which is “merely unfair or unjust” (at [121]). In his Honour’s view, statutory unconscionability “is a concept which requires a high level of moral obloquy” or which is “highly unethical” (at [121]).

29.    In Australian Securities and Investments Commission v National Exchange Pty Ltd (2005) 148 FCR 132, the Full Court of the Federal Court again emphasised the need for moral obloquy. The Court held that the conduct at issue involved “a strong element of moral obloquy”, because it was intentionally “directed at exploiting the targeted recipients” (at [43]). That case concerned “predatory conduct designed to take advantage of inexperienced offerees”, in the hope that some of them “would act irrationally from a purely commercial viewpoint” (at [43]). The targets of the conduct were persons “perceived to be vulnerable targets and ripe for exploitation, as they would be likely to act inadvertently and sell their shares without obtaining proper advice” (at [43]).

30.    The Court of Appeal in New South Wales has recently affirmed the need for moral obloquy as an essential ingredient of statutory unconscionability. In Tonto Home Loans Australia Pty Ltd v Tavares [2011] NSWCA 389 Allsop P (with whom Bathurst CJ and Campbell JA agreed) referred with approval to the above-quoted statements by Spigelman CJ in World Best Holdings (at [291]) although his Honour questioned the need to demonstrate “a high level” of moral obloquy:

Whether that is too stringent and whether “significant” or “real” may be preferable need not be decided. What is required is some degree of moral tainting in the transaction of a kind that permits the opprobrium of unconscionability to characterise the conduct of the party. (at [293])

(Emphasis added by Hargrave J.)

31.    It follows that the conduct in question must be more than negligent. It will usually involve some deliberate wrongdoing, although there may be cases where recklessness will suffice (ACCC v 4WD Systems Pty Ltd (2003) 59 IPR 435, [185]; ACCC v Allphones Retail Pty Ltd (No 2) (2009) 253 ALR 324, [113]; ACCC v Dukemaster Pty Ltd [2009] FCA 682, [17]; ACCC v Seal-a-Fridge Pty Ltd (2010) 268 ALR 321, [16]). For example, cases involving wilful blindness. Ultimately, as the cases demonstrate, each case must depend upon its own circumstances and the Court must make a value judgment as to whether to characterise the conduct with “the opprobrium of unconscionability (Tonto Home Loans Australia Pty Ltd v Tavares [2011] NSWCA 389, [293]).

11    According to the applicant, the methods used by the respondent’s representatives to sell vacuum cleaners to the five elderly women with whom the present proceeding is concerned were unconscionable in the circumstances, for a number of reasons. I shall consider those reasons in due course, but in brief they were that the appointment at the householder’s home was based upon the representation that the purpose of the call was to provide a free maintenance check; that the primary purpose of the call, by contrast, was to sell a new Lux vacuum cleaner; that the maintenance check itself was cursory, and carried out by a person who lacked any relevant mechanical or electrical qualifications; that the comparison test (between the householder’s existing vacuum cleaner and the demonstration model) was calculated only to show the former in a bad light relative to the latter, with a view to making a sale; that the householder was in a subordinate bargaining position with respect to the respondent’s representative; that there was a range of “unfair and pressure sales tactics” employed by each of the respondent’s representatives at various points; and that, unrevealed by the representative to the householder, equivalent vacuum cleaners were available in retail stores at much lower prices than those at which the representative prevailed upon the householder to make her purchase.

12    It will be noted that some of the matters referred to in the previous paragraph relate to institutional aspects of the respondent’s modus operandi, while others relate to the individual interactions between the respondent’s representatives and the householders to whom they sold vacuum cleaners. While both levels are important in understanding the applicant’s case, it should be made clear at the outset that the allegations of unconscionable conduct made by the applicant ultimately come down to the conduct of the respondent’s representatives in their dealings with the householders. The question for the court is not whether the conduct of the respondent as a business entity, abstracted from the circumstances of any particular transaction, was unconscionable. It is whether, taking into account, where relevant, the institutional aspects of the respondent’s system, the conduct of the respondent, to use the words of the statute, in connection with the supply of a new vacuum cleaner to any of the householders with whose circumstances the proceeding is concerned was, in all the circumstances, unconscionable.

13    There are, however, some observations of general application which it is appropriate to make at this stage. First, there was no suggestion by the applicant, and no evidence in any event, that the five householders with which the case is concerned were identified or chosen by the respondent by reference to their age or personal circumstances. When making an appointment for a free maintenance check, the respondent’s staff knew nothing of such matters (other than, presumably, what might have been very approximately inferred from the date of a previous sale, in cases in which there was one). So far as the respondent was concerned, these householders were just names on a list.

14    Secondly, the applicant’s case is not that advanced years was, as such, a circumstance of special disadvantage in the sense, for example, discussed by Finn J in ACCC v Radio Rentals Ltd (2005) 146 FCR 292 at 296-297 [11], [14]-[17]. The applicant did rely, of course, on the individual circumstances of each householder, as they would have appeared to the respondent’s representative, and it was at least implicit in its case that the representative should, in each case, have modified his approach to pay due regard to the householder’s apparent ability to make the decision involved in a substantial purchase such as was proposed. But there was no suggestion that, merely because a householder was elderly, it was unconscionable for a representative of the respondent to propose that the householder should buy, or to persuade her of the benefits of buying, a new vacuum cleaner.

15    Thirdly, there is the issue of the purpose of the house calls made by the respondent’s representatives. According to the applicant, that purpose was to sell vacuum cleaners. The carrying out of a maintenance check was alleged to be a ruse to get the representative past the front door, and the check itself was alleged to be nominal, cursory and done by someone with no relevant mechanical or electrical qualifications. The representative was not paid for carrying out the maintenance check (his only remuneration deriving from margins on sales) and had, therefore, a structural incentive to conduct the check in ways which would lead seamlessly to the conclusion that the householder’s existing vacuum cleaner was in need of replacement.

16    The factual premises upon which this argument was based may be accepted, but it does not follow, and I would not find, that the respondent’s representatives had no genuine intention of carrying out a maintenance check on the vacuum cleaners of the householders concerned in this case. I shall say something further on this subject when I deal with the evidence as to the individual visits to the homes of these householders, but it seems that the occasions upon which the respondent’s representatives proceeded beyond their maintenance checks to the point of attempting to make a sale of a new vacuum cleaner, over the full course of a year’s work, were in the minority. It is true that the representatives were incentivised to make sales, and therefore that, from their own material points of view, their purpose was to do so. But, to get to that point, they were required first to carry out maintenance checks, and, in that sense, it was their purpose to do that when they made their calls.

17    Further, the absence of technical qualifications does not, in my view, derogate from the conclusion, which I reach, that these maintenance checks were bona fide, useful, ones so far as they went. Although not technicians, the representatives were well-versed in the functioning of vacuum cleaners, and clearly brought to the subject a degree of know-how that would exceed that possessed by the average householder. At the general level (ie abstracted from the evidence as to any particular instance) I do not consider the respondent’s modus operandi to amount to unconscionable conduct for the reason only that the householders were not informed, at the times when the relevant appointments were made, that its representatives might move beyond the maintenance check stage to the point of attempting to interest the householders in purchasing vacuum cleaners.

18    Fourthly, aside from the issue just dealt with, the respondent’s activities must be accepted as both conventional and traditional ones. The applicant accepted that I might take judicial notice that the travelling vacuum cleaner salesman has been part of the Australian domestic landscape for a very long time, and that all of the women with whom the case is concerned would be aware of that. Neither was the product being sold a new-fangled product with which an elderly householder might not be familiar. All of the relevant householders had previously owned and used vacuum cleaners. In considering purchases of the kind that they made from the respondent, they were in familiar territory.

19    Fifthly, it was a part of the applicant’s case that the conduct of the respondent in making each of the sales was unconscionable because the representative, while alone with the householder in the latter’s home, offered a discounted price if a vacuum cleaner was purchased then and there. This was said to deny the householder the opportunity to “shop around” and to consult a family member, or trusted friend, who might be more worldly-wise about the kind of investment which the respondent’s representative proposed. This was a high-level submission made by reference to the respondent’s modus operandi rather than to the circumstances of any of the individual householders with which the case is concerned. However, the respondent’s conduct in these respects cannot be considered in the abstract from the terms of the contract which it invited the householder to make, and which each did make, in relation to the purchase of a new vacuum cleaner. Each such contract contained, in upper case letters adjacent to the place where the householder signed, an endorsement to the effect that it was subject to a cooling-off period of ten days. The endorsement was not always in the same terms, but in each case it gave rise to a contractual entitlement in the householder to withdraw from her purchase within the stated period.

20    Sixthly, there are the provisions of subs (2) of s 51AB of the TP Act, and the corresponding provisions of s 21(2) of the AC Law, to be considered. Although those subsections must be applied to the circumstances of a particular transaction, the applicant relied on them in some ways at least which related to the way the respondent carried on business, and this had necessary relevance to any and every transaction completed by its representatives, including the five involved in the present case.

21    With respect to para (a) of s 51AB(2) (and of s 21(2)), the applicant submitted that each of the householders in the present case was necessarily in a weaker bargaining position than the representative with whom she was dealing because she was unprepared to negotiate the purchase of an expensive appliance (ie because she had been told no more than that the representative would carry out a maintenance check on her existing vacuum cleaner), because she was less knowledgeable about the subject than was the representative, because she was alone with the representative in her house at the time and thus unable to appreciate what might have been the other purchasing options potentially available to her, and because, often prompted by the availability of a “discount”, she was required to make a decision then and there without the ability, at least in any realistic way, to consult others on the proposed investment. In part, this submission was just another way of putting a number of the propositions with which I have dealt elsewhere in these reasons (the householder being unaware that the purchase of a new vacuum cleaner was in prospect, and she being unable to consult someone, for instance). But in part the submission also makes a valid point about relative bargaining strength, namely, that based upon an imbalance in the parties’ knowledge of the product itself and of alternative purchasing options. I accept that as a general proposition but, as will become clear, it cannot be assumed that the facts upon which the submission was implicitly based existed in the circumstances of all of the householders with whose circumstances the present case is concerned.

22    There are other respects in which the strength of the bargaining positions of the householders and the respondent’s representatives may also be considered. After the conduct of a maintenance check on the householder’s existing vacuum cleaner, it would have cost her nothing to send the representative on his way. But the housecall itself, and the time spent carrying out the maintenance check, were to the representative’s account in the sense that, if a sale did not ensue, he would have spent that much of his time, and incurred his relevant travelling costs, for no return. The longer the conversation lasted, the more the representative stood to lose (in productive time) if ultimately he were unable to sell a new machine to the householder. If a transaction is looked at in this way, there is a sense in which the representative’s bargaining position was somewhat weaker than that of the householder.

23    Ultimately, the purpose of s 51AB(2)(a) was not to have the court make a determination on the question of where the greater bargaining strength lay, but to introduce a consideration to which the court might have regard in deciding the matter of unconscionable conduct which arose under subs (1). Absent a consideration of the facts of individual cases, to which I shall come below, I am disposed to think that the applicant’s bargaining strength point makes little, if any, contribution to the determination of the ultimate question.

24    With respect to para (e) of s 51AB(2) (and of s 21(2)), the applicant led evidence from which I was urged to find that vacuum cleaners the equivalent of those sold to the householders in the present case could have been acquired from a person other than the respondent at much lower prices than those at which the respondent’s representatives in fact sold their products to those householders. In this respect, the applicant called Jason John Biddell, merchandise operations manager at International Cleaning Solutions Pty Ltd, which trades as “Godfreys”, to give evidence as to the price and specifications of vacuum cleaners other than those sold by the respondent. With respect to barrel-type vacuum cleaners – that is to say, vacuum cleaners which the applicant would suggest should be compared with the respondent’s “Sora Royal” model – Mr Biddell cited seven machines, priced between $332 (the price of the Hoover Aura II in February 2010) and $1370 (the price of the Wertheim 6030/6035 in February 2011). Although all of these machines were priced considerably less than the Sora Royal sold by the respondent, it was the “Wertheim 4430” which the applicant identified as, apparently, its most useful point of comparison. The price of this machine varied from $914 in April 2009 to $1,098 in July 2011. As will appear below, that was much less than even the lowest discounted price at which any of the householders in the present case purchased her Sora Royal machine from the respondent.

25    The Wertheim 4430 and the Sora Royal had a number of things in common. They had bag dust collectors; they had HEPA filters; they had variable power; and the reach of their cords (defining the operating radius of the machine) was roughly of the same order (12 m in the case of the Wertheim and 10.8 m in the case of the Sora Royal). However, there were also points of difference. The weight of the Wertheim was 13 kg, while that of the Sora Royal was 6.3 kg. The “power” of the Wertheim was 2100 W, while that of the Sora Royal was 900 W. These differences were important ones. It is apparent to me from the evidence called in this case that the weight of a vacuum cleaner is an important consideration, especially for an older person. With respect to power, while the raw figures may give the impression that, as the more “powerful” machine, the Wertheim was “better” in this respect, the evidence was that, although a vacuum cleaner with a higher power figure would use more electricity than one with a lower figure, it would not necessarily be a more effective machine in terms of the suction provided at the point of contact with the surface being cleaned. Under cross-examination, Mr Biddell was asked the following questions, and answered as follows:

But with vacuum cleaners a higher wattage does not necessarily represent the suction, does it? Correct; it does not necessarily represent better suction.

Because suction is something else, is it not? The wattage of the motor can determine the level of suction, but there is levels – as you're indicating, there is other levels of efficiency of suction pressure.

Because, I suggest, suction is not the same thing as power; it's not a direct relationship between the two? The power of the motor does – can dictate the suction of the machine. So there is a relationship, but it's not necessarily the only answer.

26    Mr Biddell also provided the prices and specifications of five upright vacuum cleaners, which were proffered by the applicant as comparable with the respondent’s Kobold machine. In their final submissions, counsel for the applicant did not point to any particular machine on this list which was most directly comparable with the Kobold, so I shall take the most expensive machine on the list, the Miele S7580 priced at $834 in September 2010, for the purposes of my present comparison. As will appear, that price was only about one-half of the price of the respondent’s Kobold machine which was sold to one of the householders in the present case. Both the Miele and the Kobold had variable power levels and both had bag dust collectors, but there is no other respect, in the evidence led in the case, in which I was guided to a conclusion that they were similar. There was no evidence of the weight of either machine, for instance. The rated power of the Miele was 1800 W, while that of the Kobold was 900 W. In this respect, I would refer to the evidence of Mr Biddell referred to above.

27    Notwithstanding the differences to which I have referred, were these vacuum cleaners, available for purchase from retailers other than the respondent, “equivalent goods” for the purposes of s 51AB(2)(e)? The applicant pointed to the language used by parliament in s 51AB – “identical or equivalent goods” – and submitted that the use of the word “equivalent” evinced parliament’s intention “to broaden the categories of goods with which supplied goods may be compared beyond goods that are, in all respects, the same as the supplied goods.” There can be no doubt but that a broadening from the rather narrow term “identical” was here intended. But the question remains, what does “equivalent” mean in the context of s 51AB?

28    The relevant dictionary meaning of “equivalent”, given by the second edition of the Oxford English Dictionary, is “that is virtually the same thing; identical in effect; tantamount”. If this meaning is to be taken as that adopted by the legislature under s 51AB, it suggests that there was only a slight broadening of the meaning from the narrower term “identical”. However, while this purely grammatical meaning of the term is useful as a starting-point, the purpose of s 51AB(2), and the context in which the term is there used, are also important. At the same time, I must resist the temptation to impress upon the term a meaning which is driven by the facts of the present case.

29    The context in which s 51AB(2) operated was one in which a corporation was presumptively engaged in the project of supplying, or attempting to supply, goods or services to a person, referred to as a “consumer”. The equivalence to which para (e) referred was, in my view, that which the notional consumer would perceive, taking a reasonable view of all the facts, on the (implicitly unfounded) assumption that he or she knew those facts. Taking that approach, I do not consider it to have been established on the evidence in the present case that the “other goods” to which the applicant pointed were the equivalent of those being sold by the respondent. In the case of the Sora Royal, the points of differentiation referred to above – weight and power – cannot be dismissed as neither here nor there. A properly informed, reasonable, consumer might well regard those points as sufficient to negate any possibility of equivalence as between the two machines. In the case of the Kobold, I would say the same about the power comparator and, as I have said, there was no evidence as to the weight of the “other” machine.

30    It is also, in my view, significant that we are here concerned with branded consumer goods. In the absence of evidence, I would be slow to assume that the reputation of a particular brand might not make an important contribution to the exercise of notional differentiation which arose under s 51AB(2)(e). There would, for example, be a number of motorists who would be horrified by the suggestion that a Ford was the equivalent of a Holden, even where the specifications of the two cars being compared were otherwise indistinguishable. I think it unlikely that the legislature intended this provision to prompt a court towards a conclusion of unconscionability where the conduct in question involved an attempt to sell a product of one well-known brand in circumstances where a comparable product under another well-known brand was available for purchase elsewhere at a lower price.

31    It was, of course, an important part of the applicant’s case under s 51AB(2)(e) that the price at which the comparator vacuum cleaners might have been obtained was, in all cases, not just somewhat less than the price paid by each of the five householders in the present case, but considerably less than that price. Although not put explicitly this way, the sense of the applicant’s submissions was that, against this price differential, the differences in the specifications of the machines concerned were of little moment. This approach, however, is what might be described as a “value for money” one and is not, in my view, responsive to the terms of the statute. Unless the goods being compared were identical or equivalent, the price of them would not fall to be considered. If they were identical or equivalent, then “the amount for which, and the circumstances under which”, they might have been obtained from the alternative supplier would be central considerations. But the respondent’s point was that it had not been established, as a matter of evidence, that there was any other vacuum cleaner that was the equivalent of its own Sora Royal or Kobold machine. For reasons given above, I accept that submission.

32    Against the background of those general observations, and conclusions, I turn to the five individual householders to whose circumstances the applicant’s case related.

33    The first of those householders was Elsie Elliott, who was 91 years old in April 2009. She did not give evidence, but some limited evidence as to her circumstances was given by her son Nicholas. Mrs Elliott had lived alone at her home in Darra, Queensland, since 1992. She received a war widow’s pension and a part aged pension. Her son (who lived about a 15-20 minute drive away) had, since at least early 2009, devoted an increasing amount of time to his mother’s care. He took her shopping when needed, but, at least as at the time which is relevant to this proceeding, that was because Mrs Elliott did not drive (in fact, she had never driven) and because she had recently had a fall, which affected her confidence.

34    Mrs Elliott received a telephone call from the respondent, in the course of which she accepted the respondent’s offer to have a representative undertake a free maintenance check of her then existing vacuum cleaner. The appointment was made for 9 April 2009. Before turning to the evidence, such as it was, of what actually transpired on that day, I shall refer to the evidence of the representative, Norman Marinus DeVisser, who called on Mrs Elliott.

35    In his affidavit, Mr DeVisser referred to the routine which he customarily followed when he made such calls. He said that home visits would last between 40 minutes and an hour. They would take less than 40 minutes on occasions on which he did no more than “than just check the machine and go.” He said that he would check the householder’s existing vacuum cleaner filters, open the compartments of the machine and turn the machine on and off. He would check the hose for blockages, and the plug for any dangerous exposed wires. Having done the check, if he thought that the vacuum cleaner was not running at optimal level, he would tell the householder so and offer to give the vacuum cleaner a “dust test” using a machine which he had in his car. If the householder accepted that offer, which occurred in the majority of cases, he would test the efficiency of the existing vacuum cleaner by conducting a comparison test. This involved vacuuming an area of carpet with the householder’s existing machine, and then vacuuming the same area of carpet with a demonstration model which he had with him. A black cloth was placed in the demonstration model for this purpose. If the test showed that the existing vacuum cleaner was leaving a lot of dirt behind and not functioning as it should, Mr DeVisser would say something along the following lines: “What do you think? What does it make you think about your vacuum?” At this point, according to Mr DeVisser, some householders would say that they were concerned by the results of the test, while others would defend their existing machines, and tell him that they were happy with them. However, he accepted that, where the customer had a vacuum cleaner that was a number of years old, it was likely, if not inevitable, that the suction would not be performing in the way that it had when that vacuum cleaner was new. He accepted that an older machine could not possibly perform to the same standard as a new Lux machine.

36    Mr DeVisser said that “on some occasions” the results of the comparison test would lead to a discussion about purchasing a new Lux machine. Sometimes, there would be discussions about other options, such as repairing the existing machine, or buying a cheaper machine from a shop. When these options were raised, Mr DeVisser would express the belief, which he held, that none of them was likely to replicate the results just shown by using the demonstration model. He accepted, to use the words of cross-examining counsel, that he “discouraged them from repairing their vacuum”. However, he would recommend the purchase of a new Lux vacuum cleaner only if the comparison test showed that the existing vacuum cleaner was not functioning properly. He said that he never “pushed hard for sales”, believing that the culture at the respondent’s organisation was against pressure sales. If a purchase was made, he had a practice of informing customers of the 10-day cooling off period.

37    If Mr DeVisser thought that a householder was “particularly elderly” he would ask them if they needed to consult with someone prior to purchasing a new vacuum cleaner. Occasionally, such an inquiry would be met with a sharp response from the householder. Mr DeVisser said that a lot of older people were “fiercely independent” and he needed to be careful when inquiring if they needed to consult with someone prior to making a purchase, in order to avoid offending them. He said that “you wouldn’t sell somebody a vacuum cleaner who was not in full receipt [sic] of all their faculties.” Under cross-examination, he said that age alone was not the indicator of when a customer might be unable to complete an important purchase, adding: “People can be very on in years and still be very assertive and very in charge of their life.” It was more in a case in which the customer displayed characteristics like timidity and frailty, together with obvious old age, that Mr DeVisser would “ask them if they wanted somebody else to come in.”

38    What actually happened on the occasion of Mr DeVisser’s visit to Mrs Elliott’s home on 9 April 2009 was the subject of almost no evidence. As mentioned above, Mrs Elliott herself did not give evidence. Although Mr DeVisser stated in his affidavit that he remembered Mrs Elliott “to a limited extent” and that the “impression” he had of her was that she was “a very nice, friendly lady”, it was clear from his oral evidence that he had no actual recollection of the visit at all: he could not recall what Mrs Elliott looked like, or anything about her house (such as whether it had mostly wooden floors), or whether Mrs Elliott was elderly in appearance, for example. The whole of Mr DeVisser’s evidence, both in chief and under cross-examination, related to what he “would have” done and said in particular circumstances, such as being confronted with a frail, timid, old householder. Unhelpful as all of this was, Mr DeVisser rightly pointed out that the events about which he was being questioned occurred more than three years previously, and related to one of what were many, more or less similar, service/sales calls which he made in the regular course of his then vocation.

39    The objective evidence establishes that Mrs Elliott did purchase a Lux Sora Royal vacuum cleaner, together with accessories, bags and filters, from Mr DeVisser on 9 April 2009. The agreed price was $2,280, after allowing for a discount of $290. Mrs Elliott signed a contract, and immediately above her signature were the following words:

THIS CONTRACT IS SUBJECT TO A COOLING-OFF PERIOD OF TEN DAYS

No cash or consideration can be accepted until after the 10 day cooling-off period.

Mrs Elliott’s cheque butt was dated 19 April 2009 but, despite submissions to the contrary made on behalf of the applicant, Mr DeVisser rejected the suggestion that he procured Mrs Elliott to post-date her cheque which he then took with him on 9 April 2009. He referred to his practice of leaving an envelope with the householder in which a cheque might be posted to the respondent after the cooling-period. Although there is no evidence as to what was actually done in this instance, the date on the cheque butt is equally consistent with things having been done regularly as Mr DeVisser insisted, against which there is no evidence from which I could infer that Mr DeVisser took a post-dated cheque with him on 9 April 2009.

40    About three months later, in mid-July 2009, Mr Elliott was visiting his mother when he noticed the new Lux vacuum cleaner. Upon asking his mother why she bought that machine, he was told that it was because “the old one was no good”. However, Mrs Elliott could not recall who told her that, how she had bought the new one, or from whom. On 25 July 2009, Mr Elliott wrote a lengthy letter to the respondent in which he, in effect, set out several reasons why the respondent ought not to have sold his mother a new vacuum cleaner. The respondent replied with an offer to refund Mrs Elliott $360 in respect of the electric brush accessory, but otherwise declined to accept the return of the machine because of the passage of time and the fact the machine “must have been used since it was purchased”. Although not satisfied with this response, Mr Elliott did not bother to obtain the refund in respect of the electric brush accessory.

41    The applicant’s case in relation to Mrs Elliott was that Mr DeVisser knew or ought to have known that Mrs Elliott was of very advanced age, that she had not been put on notice that the purpose of Mr DeVisser’s visit was to sell her one of the respondent’s vacuum cleaners or that she might need to make a purchasing decision during the visit, and that she was not, at that time, in a position to compare the Sora Royal with an alternative product. It was alleged that Mr DeVisser knew or ought to have known that Mrs Elliott was “susceptible to pressure sales tactics and unfair sales tactics”, and that (and that Mr DeVisser knew or ought to have known that) Mrs Elliott’s bargaining position relative to Mr DeVisser was “very weak”. It was also said that the fact that Mr DeVisser was alone with Mrs Elliott in her home at all relevant times, and that she did not consult with anyone else about the intended purchase of the respondent’s product, added justification to those allegations.

42    Given the absence of Mrs Elliott from the witness box, the applicant’s evidentiary case with respect to her proceeded at a rather high level. With respect to relative bargaining positions, that case amounted to no more than the general propositions to which I have referred at para 21 above. There was no evidence of any “bargaining” in fact carried out on 9 April 2009, but the record shows that a discount of $290 against the respondent’s list price was offered to Mrs Elliott. The reasonable inference is that Mr DeVisser was anxious not to have reached that stage of his conversation with Mrs Elliott without making a sale. The applicant submitted that a different complexion was to be put on the discount. In its written outline, it enclosed the word “discount” between inverted commas (thereby delegitimizing the concept conveyed by the word), and added that the use of the word created the impression that the opportunity to buy the product at the discounted price would be lost if not taken up then and there, thereby dissuading Mrs Elliott from taking time to consider the offer, and thus from shopping around. Thus the offer of the discount was said to be an “unfair sales tactic” (presumably picking up s 51AB(2)(d) of the TP Act). This very high-level submission was, however, wholly intuitive: the facts as to how Mr DeVisser interacted with Mrs Elliott in relation to the discount were not the subject of evidence. The applicant’s case was not based on the proposition that the discount was not in fact a discount against a bona fide list price, and if Mr DeVisser chose to offer it (out of the margin that was otherwise his) in order to close the deal, as it were, I would regard it neither as an unfair sales tactic nor as a demonstration of the greater strength of his bargaining position.

43    It has not been established on the evidence that Mrs Elliott did not consult (eg by telephone) with someone else before she decided to buy a vacuum cleaner from Mr DeVisser, but I am prepared to assume, favourably to the applicant, that she did not. Even so, I could not find that Mr DeVisser’s conduct was such as to deprive her of the opportunity to contact someone. Here again the applicant’s failure to call Mrs Elliott makes it very difficult to accept the factual premise upon which its case is based. If Mrs Elliott presented as a frail and timid old lady, and had Mr DeVisser followed his standard practice, he would have invited her to consult with someone. If, on the other hand, she presented as an independently-minded, albeit elderly, lady, he presumably would not have. If he did make such a discrimination, I do not think that Mr DeVisser would have been guilty of an unfair sales tactic. If that is the way he approached the subject, he was, in my view, being both respectful and realistic.

44    Neither, in my view, would it have amounted to an unfair sales tactic for Mr DeVisser to have dissuaded Mrs Elliott from having her existing vacuum cleaner repaired, if (which is not established) that is what he did. The applicant’s case on this aspect seems to have been based on the silent premise that the court would regard it as obvious that having an old vacuum cleaner “repaired” would necessarily be the householder’s first port of call if that machine were not working at optimal efficiency. The evidence would not justify such an approach. The court knows nothing about the mechanical condition of Mrs Elliott’s vacuum cleaner, nor of whether some unidentified process of “repair” might have been viable.

45    As will be apparent, there is a severe evidentiary deficiency in the applicant’s case in relation to Mrs Elliott. Most of the matters dealt with above have proceeded by reference to the respondent’s general system and the methods which the applicant invited me to infer were most probably deployed by Mr DeVisser. Nothing reaches the point of warranting the conclusion that the respondent’s conduct was unconscionable.

46    Returning to s 51AB(2), I have dealt with para (a) above. For reasons which I have set out, I would answer the question implicitly posed by para (d) in the negative. The applicant did not submit that the questions posed by paras (b) and (c) were not to be answered in the negative and the affirmative respectively. And, under para (e), I have held that there were no relevant goods which were the equivalent of the vacuum cleaner purchased by Mrs Elliott.

47    Having regard to the matters discussed above, it is not established that the respondent’s conduct in relation to Mrs Elliott was morally tainted in the sense explained in the authorities. I do, therefore, reject the allegation that the respondent engaged in unconscionable conduct when Mr DeVisser sold her a Lux vacuum cleaner on 9 April 2009.

48    Hazel Oxley was 82 years old in February 2010. She lived in a three-bedroom house in Maryborough, Queensland, where she had lived alone since 2004. She had purchased an “Electrolux” vacuum cleaner in the 1970s, this investment having been made from a travelling salesman who came to her home and demonstrated the machine which he was selling. Mrs Oxley purchased a “Lux” vacuum cleaner in 2003, again from a travelling salesman who demonstrated the new machine. She retained the tax invoice which she had signed on 10 July 2003, and this indicated that she had paid $1,356 for that vacuum cleaner. Mrs Oxley never had any problems with the vacuum cleaner which she purchased in July 2003. She could not recall her weekly cleaning lady, Beverley, ever informing her of any problems with that vacuum cleaner.

49    In early February 2010, Mrs Oxley received a telephone call from a representative of the respondent. The representative said that the respondent had “someone doing free maintenance checks in your area”, and asked Mrs Oxley whether she would like someone to look at her vacuum cleaner. Because this was a free offer, Mrs Oxley accepted. It was arranged that the maintenance check would occur on 12 February 2010, and, on that morning, the person who was to carry it out, Peter Walton, telephoned Mrs Oxley and suggested a change in the appointed time, to make it later in the day. Mrs Oxley could not recall the time that was then agreed, but thought it was quite late in the afternoon, since it was “not quite dark” when Mr Walton left, and it normally got dark at about 7:00 pm at that time of the year.

50    At the agreed time on 12 February 2010, Mr Walton attended at Mrs Oxley’s home. Mr Walton gave Mrs Oxley a pamphlet, which she did not retain. He did not carry any tools with him. Mrs Oxley showed Mr Walton her vacuum cleaner, and he inspected it, turned it on and used it briefly. He drew Mrs Oxley’s attention to a noise which, as he told Mrs Oxley, made it sound as though the suction on the machine was not working properly. Mrs Oxley said that she was worried that she did not change the filters often enough. (In her evidence in the case, Mrs Oxley said that she felt guilty about not changing the filters sufficiently often.) Mr Walton then asked Mrs Oxley if he could show her a new “Lux” vacuum cleaner, and she agreed.

51    Mr Walton retrieved a new Lux vacuum cleaner from his vehicle, and demonstrated it to Mrs Oxley. He used Mrs Oxley’s own vacuum cleaner on a small patch of carpet, and then, having put a white cloth in the new machine, used that machine on the same patch of carpet. Retrieving the white cloth from the machine, Mr Walton indicated how dirty it had become, and said to Mrs Oxley: “Your vacuum cleaner is not cleaning properly. It is leaving all that dirt behind.” At the end of the demonstration, Mr Walton offered to sell Mrs Oxley the machine that he had been using “at a really low price”. He said that the original price for the vacuum cleaner was $2,605, but that he would offer Mrs Oxley $300 as a trade-in on her old vacuum cleaner, and a further discount because the machine he was selling was a demonstration model. Mrs Oxley accepted that offer, and agreed to pay $1,999 for the new vacuum cleaner.

52    Mrs Oxley and Mr Walton executed a contract for the sale, which also stood as the respondent’s invoice. Immediately above Mrs Oxley’s signature on the contract (which Mrs Oxley did not read) was the following endorsement:

THIS CONTRACT IS SUBJECT TO COOLING-OFF PERIOD OF 10 DAYS

No cash or consideration can be accepted until after the 10 day cooling-off period.

When pressed under cross-examination, Mrs Oxley accepted that it was possible that Mr Walton had mentioned to her the existence of the cooling-off period, but her evidence was that she had no recollection of it. Since Mr Walton did not give evidence, I would find that no mention was made of the subject.

53    Mrs Oxley paid Mr Walton by cheque at the time they executed the contract. Mr Walton left Mrs Oxley with the new vacuum cleaner, and took her old one away as the trade-in. In all, Mr Walton was at Mrs Oxley’s home for 1½ -2 hours.

54    Some time after she had bought the new vacuum cleaner, Mrs Oxley “felt upset about the purchase because I could not really afford the new Lux vacuum cleaner and felt I had been talked into purchasing it”. She decided that she did not want to keep it. She felt “stupid” for having done so, but was “too embarrassed to admit it”. Then, about two weeks after the purchase, Mrs Oxley’s cleaning lady, Beverley, told her that the power head was too big and clumsy, and that she could not get it around the furniture properly.

55    Mrs Oxley asked her son, Owen, to help her contact the respondent. They sent the new vacuum cleaner back to the respondent on a “cash on delivery” basis. A few days later, Mr Walton came to Mrs Oxley’s house, and Owen met him at the door. Having spoken to Mr Walton, Owen returned to Mrs Oxley with a vacuum cleaner that was the same shape as her old one. However, Mrs Oxley later noticed that she did not have the accessories that she had purchased in 2003, that there was “an extra piece of electrical wire on it” and that “the hose was broken”. Although she believed that Mr Walton did not give her back her original vacuum cleaner, she said nothing to Owen or anyone else about that. Mrs Oxley subsequently received a refund cheque, in the amount of $1,999, from the respondent.

56    Since the events of February/March 2010, Mrs Oxley has purchased a new vacuum cleaner. She did that, with the assistance of her son Owen, at a large homewares retailer.

57    Mrs Oxley, who was about six weeks’ shy of her 85th birthday when she gave evidence (by video link), appeared to be well in command of the subjects about which she was questioned. Her evidence in chief was given on affidavit and, responding to questions from senior counsel for the respondent, she said that the affidavit was faithful to the statements which she had originally made to the applicant. Her answers to questions put to her in cross-examination were clear, firm and generally economical. She was obviously making a concerted effort to respond accurately, and showed no hesitation in indicating her inability to recollect the details of events in which she had been concerned, where such a response was appropriate. On the other hand, she was firm and categorical in other respects, and I have no reason to doubt the general accuracy of her evidence. She struck me as a no-nonsense kind of person who would not readily suffer an attempt by someone else to have her act adversely to her own better judgment. She was not pliable in the hands of senior counsel cross-examining, and I doubt that she would, in February 2010, have been pliable in the hands of Mr Walton.

58    Although Mr Walton did not give evidence, the description of the events of 12 February 2010 given by Mrs Oxley struck me as quite benign against the “moral tainting” standard of conduct required under s 51AB. Notwithstanding that, the applicant pressed for a finding that the respondent’s conduct was relevantly unconscionable. It did so substantially by reference to the allegation that Mr Walton had deployed unfair sales tactics when he sold the vacuum cleaner to Mrs Oxley. However, the nature of the tactics, and what was unfair about them, were not clearly set out in that section of the applicant’s outline which dealt with her circumstances. Many of the matters were not tactics by Mr Walton at all, but irritations felt by Mrs Oxley for having made a purchase which she later regretted.

59    For example, it was said that Mrs Oxley had no training or special knowledge about vacuum cleaners. She normally purchased domestic appliances after visiting retailers and comparing their offerings. However, she had previously purchased two vacuum cleaners from travelling salesmen. Once it became apparent, after the maintenance check, that the sale of a new (or near-new) machine was in contemplation by Mr Walton, Mrs Oxley was not in unfamiliar territory. The applicant’s complaint that she did not previously know that she was going to be offered a vacuum cleaner for purchase does, in these circumstances, ring a little hollow. Of course she knew less about vacuum cleaners than Mr Walton, but that was why he was at her house checking her existing machine. He did check the machine, and assessed that a comparison test should be carried out with the machine which he carried as a demonstrator. That test, on Mrs Oxley’s evidence, revealed that her existing vacuum cleaner was leaving behind dirt which the demonstrator collected. Mrs Oxley then accepted Mr Walton’s offer to sell her the demonstrator, at a discount of about $600 to the list price of a new vacuum cleaner. I cannot understand how Mr Walton’s conduct as disclosed in this evidence might be regarded as involving unfair sales tactics.

60    The applicant’s other complaints in relation to Mrs Oxley included that Mr Walton made his call late in the afternoon and stayed with her for such a period that it became rather late, and that he talked a great deal while carrying out the demonstrations and tests of the two machines. As I have mentioned, these complaints have the sense of irritations, and go nowhere near the territory which is the concern of s 51AB. The applicant placed some store by Mrs Oxley’s evidence that she would not have allowed Mr Walton to visit her home had she known that he intended to attempt to sell her a new vacuum cleaner. Although this strikes me as the ex-post rationalisation of someone who regretted the course which she voluntarily followed, I was not invited by the respondent not to accept that evidence, and I am prepared to do so. But Mrs Oxley’s actual reaction to the first mention by Mr Walton of the possibility of the purchase of a new machine, as stated in her own affidavit, leaves no scope for a finding that the latter used unfair sales tactics in relevant respects:

We then had a conversation to the following effect:

He said:    Can you hear that noise? That doesn’t sound like the suction is working properly.

I said:    I’m always worried that I don’t change the filters often enough.

He said:    Can I show you a new Lux vacuum cleaner?

I said:    Yes.

61    With respect to the matters covered by subs (2) of s 51AB, save for the general submissions to which I have referred, it was not put by the applicant that Mr Walton was in a stronger bargaining position than Mrs Oxley. I have dealt, adversely to the applicant, with the question of unfair sales tactics which arises under para (d) of the subsection. I would answer the questions in paras (b) and (c) no and yes respectively. As to para (e), I have held above that there was no equivalent vacuum cleaner with which the demonstrator sold by Mr Walton might be compared on the matter of price.

62    In the case of Mrs Oxley, the applicant submitted that the respondent had breached certain provisions of the Fair Trading Act 1989 (Qld) (“the FT Act (Q)”) when Mr Walton sold her a vacuum cleaner on 12 February 2010. The first was s 62(1):

If a supplier or dealer accepts any money or other consideration from a consumer under a prescribed contract or a related contract or instrument before the expiration of the cooling-off period, the supplier and the dealer each commit an offence against this Act.

When Mr Walton received Mrs Oxley’s cheque, he did so in breach of this provision.

63    The applicant also submitted that Mr Walton had contravened s 64(1) of the FT Act (Q), which provides:

A dealer who calls at premises for the purpose of negotiating a contract to which this division applies or for an incidental or related purpose shall leave the premises at the request of the occupier of the premises or any person acting with the actual or implied authority of the occupier.

There was no suggestion that Mrs Oxley requested Mr Walton to leave her home at any time, but the applicant submitted that Mr Walton had contravened the section by failing to inform Mrs Oxley of her right to make such a request. But s 64(1) did not impose an obligation of that nature on Mr Walton. The issue was not fully developed in the submissions made on behalf of the applicant and, for my own part, I cannot see where there was a breach of this provision on the part of Mr Walton.

64    Taking into account the respondent’s admitted breach of s 62(1) of the FT Act (Q), I am nonetheless unpersuaded that, in all the circumstances, the respondent’s conduct in relation to Mrs Oxley was unconscionable.

65    Mavis May was 93 years old in September 2010. She lived alone, and had done so at the same address since the death of her husband 40 years ago. She had purchased an “Electrolux” vacuum cleaner in January 1995, this investment having been made from a door-to-door salesman at a cost of $485. That machine had functioned well, and Mrs May had not contemplated having it serviced.

66    About three weeks into September 2010, Mrs May received a telephone call from someone representing the respondent. This person said that she had noticed that Mrs May had an old Electrolux vacuum cleaner, “and it will need a service”. She asked if the respondent could send someone around to service Mrs May’s vacuum cleaner. She had received similar calls in the past, but, on each such occasion, she had told the caller that she was not interested. On this occasion, however, Mrs May agreed, as she thought that it might be time for her vacuum cleaner to have a check-up, and because the offer made to her was for a free service. In due course, one of the respondent’s sales agents, Owen Manga, visited Mrs May at her home. I shall refer to the actual details of that visit presently, but first I should relate the substance of Mr Manga’s evidence with respect to what he described as his standard “routine” when he called at the home of a potential customer.

67    Mr Manga said that the appointments made for him by the respondent were for the purpose of performing a free maintenance check on the householder’s existing vacuum cleaner. He did not require tools to perform this check. Generally, the check would involve checking the filters, checking the bags, checking the hose and pipes, examining the cord, plug and rewind mechanism for exposed wires and opening and checking the compartments. The check would also involve a general assessment of the age of the machine, how well maintained it was, and how effectively it was operating. Mr Manga would usually turn the machine on and make an assessment of how it was functioning. If he thought it would be useful, he would offer to conduct a “suction” or “efficiency” test on the machine. This would involve comparing the householder’s existing machine with the performance of a demonstration model which he carried in his car. If the householder indicated an interest in such a comparison, Mr Manga would get the demonstration model to conduct the test. The test involved using the existing machine to vacuum an identified section of carpet, and then vacuuming the same section with the demonstration model. The latter was equipped with a black cloth that sat in place of the dust bag. This cloth would show the additional dirt and dust collected by the demonstration machine, over and above that which had been collected by the existing machine. Mr Manga accepted that, where the existing machine was an old one, almost inevitably the demonstration model would pick up dirt and dust that had been left behind by it. He would discuss the results of this test with the householder, and a discussion would then occur about replacing the existing machine.

68    Mr Manga made some attempt to quantify his success rate at selling vacuum cleaners. How many homes he visited depended upon the number of appointments the respondent had made for him. That could, it seems, have been as few as one or as many as three or four appointments per day. Over the 24 months of 2009 and 2010, he sold 160 vacuum cleaners. Allowing for the time that he had off for leave, he accepted that this figure represented about 1½-2 sales per week. I got the impression that he regarded two sales per week as satisfactory. He said that, in most cases in which he reached the stage of demonstrating a machine to the householder, he went on to make a sale. It is clear from this evidence that it was only in the minority of home visits that Mr Manga carried out an efficiency test. According to his evidence, whether he did so depended on what the customer wanted, and the age of the existing machine. In a large proportion of home visits, Mr Manga would simply perform the maintenance check and leave. There would then be no demonstration, and no sale.

69    Mr Manga said that, occasionally, one of the problems which he encountered was dealing with older people, or with people who had difficulty making decisions for themselves. If he had concerns about these matters, he would generally ask questions such as might give him a sense of the householder’s capacity. In the case of elderly people, if the point were reached where the householder was contemplating a purchase, Mr Manga would often ask whether there was someone like a family member whom they wished to consult. He would say something along the lines: “Would anyone object to you buying the vacuum cleaner?” He did this because he was aware of incidents where a decision to purchase a new vacuum cleaner had been disapproved of by a family member, and almost always, in such situations, the transaction was cancelled. In such a case, it was Mr Manga who incurred the cost and inconvenience that resulted. Most often, he would have to retrieve the new machine and to return any trade-in. In all the time that he worked for the respondent or its predecessors, no-one had ever asked him to leave their house.

70    Mr Manga arrived at Mrs May’s home at about 10:00 am on 23 September 2010. Although he had little actual recollection of the course of events which followed, he insisted that he would, at least more or less, have followed his standard routine as described above. Save in respect of particular conflicts between his evidence and that of Mrs May, to which I shall refer, Mr Manga was not seriously challenged on that evidence. For her part, Mrs May remembered only certain aspects of the interchange between herself and Mr Manga. Her evidence was not such as would provide any basis to doubt that Mr Manga followed the broad outlines of his standard routine. I would hold that he did so. Subject to that, the actual course of the events of 23 September 2010 as related below comes, unless otherwise stated, from the evidence of Mrs May.

71    Mrs May showed Mr Manga her existing vacuum cleaner, and he plugged it in and turned it on. He opened a flap towards the rear of the machine, and showed Mrs May a spark being emitted from the mechanism inside the machine. Mr Manga could not recall this aspect of his transactions with Mrs May, but he did confirm that vacuum cleaners of the model that Mrs May had tended to give off a spark that arced across parts of their engine, as they got older. According to Mrs May’s evidence, Mr Manga said: “This is dangerous! Can I show you a new one? It’s much lighter than this one.” Mr Manga denied saying that Mrs May’s existing machine was “dangerous”. He did so on the basis that it was not part of his routine, and that he did not believe that the arcing visible in machines of that kind constituted a dangerous situation. Although he had no actual recollection of this aspect of the conversation, he thought it possible that he told Mrs May that there was a slight arcing in the motor, and that, “[l]ater on down the track you may need to do something about it, but it’s okay at the moment.” For her part, Mrs May was quite firm in her recollection that Mr Manga said that the spark visible in the machine was dangerous. Mrs May did not ask, and Mr Manga did not explain, why the vacuum cleaner was dangerous. According to her, there was no discussion about whether the vacuum cleaner might be repaired.

72    I think it likely that, in this part of her evidence, Mrs May was conflating different aspects of the conversation which she had with Mr Manga. That is to say, I do not think that Mr Manga would have immediately offered to show Mrs May a new, lighter, machine as part of his exclamation about the spark in her existing one. On the other hand, under cross-examination Mrs May was quite positive that Mr Manga had said that the spark in her machine was “dangerous”. Mr Manga was equally positive in his denial of having done so. No submission was made that either of these witnesses was doing other than conscientiously attempting to relate the facts as they recalled them. At the general level, both were, to my impression, truthful and careful witnesses. For the applicant, it was submitted that it was Mrs May who had an actual recollection of the alleged statement, while Mr Manga could say only that he “would not have” said such a thing. For the respondent, it was submitted that, absent an allegation of mendacity, considerable weight should be given to Mr Manga’s long experience of conducting home visits according to a particular routine, and thus to his oath as to what he would not have said in particular circumstances.

73    Mr Manga was not challenged on his evidence that he did not believe that arcing in vacuum cleaners of the relevant kind was dangerous. If he did say that Mrs May’s machine was dangerous, then, it would have been a conscious deception on his part. Mrs May said that the statement that her machine was dangerous was an element in her agreeing to Mr Manga showing her a new one. If made, the statement could scarcely be viewed other than as a powerful inducement to consider the purchase of a new vacuum cleaner. If the statement were consciously deceptive, it would then be a small step to hold that Mr Manga’s conduct had been unconscionable in relevant respects. Thus the finding that the statement was made would have serious consequences for the respondent. But a finding of conscious deception would also reflect most adversely on Mr Manga himself. I should not find that the statement was made unless, after taking into account the subject-matter of the proceeding and the gravity of the allegation, I have reached a state of actual persuasion that it was made: Evidence Act 1995 (Cth) s 140(2); Briginshaw v Briginshaw (1938) 60 CLR 336 at 361-362. I am not so persuaded. I must decide this part of the applicant’s case without the evidence that Mr Manga told Mrs May that, because of the arcing, the vacuum cleaner was dangerous.

74    Mrs May did agree to Mr Manga’s offer to show her a new vacuum cleaner. He left her house, and returned after a few moments with a new Lux vacuum cleaner. Mr Manga explained the new machine to Mrs May, and demonstrated all its accessories. Mr Manga used the new machine to vacuum a small section of Mrs May’s carpet, and then showed her the dirt that had been collected, which, he told her, was “pretty terrible”. Since this carpet had been vacuum cleaned only a few days previously, it did not seem right to Mrs May that such an amount of dirt was picked up by the new vacuum cleaner. According to the evidence of Mrs May, two or three times during the demonstration she asked Mr Manga how much the new vacuum cleaner would cost, and he did not respond. Mr Manga denied this version of events, but I doubt that anything turns on the point. Mrs May eventually found out the cost of the new machine. After the demonstration, Mr Manga told her that it would cost $2,650 with all the accessories. Mrs May responded, “[t]here’s no way I can afford that!” In her evidence, she said that she “ambled and … protested for quite a while before [she] agreed to purchase it”, but she eventually did so at a price of $2,050.

75    After Mrs May had agreed to purchase the new vacuum cleaner, there was a brief discussion which, it appears, involved Mr Manga making some kind of inquiry as to the possibility that other family members might not approve of the purchase. Mrs May’s evidence was that Mr Manga asked her what her family would say if they knew that she had spent as much as she had on a vacuum cleaner. She replied, “they’ll only know if I tell them”. Mr Manga could not recall the exchange, but accepted that he would often ask a customer who had agreed to buy a vacuum cleaner whether anyone would object to them having done so: see para 69 above.

76    According to the evidence of Mrs May, Mr Manga asked her if she was able to pay for the new machine in cash. Mr Manga denied that he would have said that, adding that he was “not that forthright”. Again, this was an aspect of detail that Mr Manga could not recall, but he said that his normal practice was to ask the customer how she wanted to pay for the new machine. I do not need to resolve this minor point of difference, because Mrs May was able to pay in cash, and did so. Mrs May and Mr Manga executed the respondent’s pro forma “Agreement/Invoice”, at the foot of which was the following endorsement:

IMPORTANT NOTICE TO THE PURCHASER.

YOU HAVE A RIGHT TO CANCEL THIS AGREEMENT WITHIN TEN (10) DAYS FROM AND INCLUDING THE DAY YOU SIGNED THE CONTRACT. IMPORTANT DETAILS ABOUT YOUR RIGHTS ARE SET OUT IN THE CANCELLATION NOTICE PROVIDED WITH THIS AGREEMENT.

That endorsement appeared immediately above the place on the form for the purchaser’s signature. Mrs May signed the form in that place. According to Mrs May, Mr Manga did not tell her that there was a cooling-off period, and did not give her the cancellation notice referred to in that endorsement.

77    After these transactions (Mr Manga having been in Mrs May’s house for about 1½ hours), Mr Manga left the premises, taking Mrs May’s old vacuum cleaner with him.

78    By the time that Mr Manga left Mrs May’s house, she felt “completely exasperated”. She felt that Mr Manga had talked her into purchasing the new vacuum cleaner, and she was angry at herself for purchasing something that was so expensive. She realised that she would never use most of the accessories that came with the new machine. On the same day, Mrs May received a call from her sister, Lorna Fankhauser. She told Ms Fankhauser about the purchase of the vacuum cleaner, and, later again on the same day, Ms Fankhauser’s daughter, Rhonda Smith, called to discuss the purchase of the vacuum cleaner with Mrs May. On the following Sunday, 26 September 2010, Ms Smith and her husband visited Mrs May, and together they looked at the paperwork which had been executed by Mrs May and Mr Manga. Mrs May then decided to seek a refund from the respondent, and asked Ms Smith to assist her in that regard.

79    It seems that Ms Smith telephoned the respondent, because the respondent contacted Mr Manga, as a result of which he spoke to Ms Smith directly by phone. In his evidence, Mr Manga described Ms Smith as “very aggressive on the telephone”. He offered to return to Mrs May’s home to collect the new vacuum cleaner that day, but Ms Smith asked him to do so at 8:30 am the following day. He did so, but Ms Smith had not arrived by 8:30 am, and Mr Manga, sounding (according to Mrs May) angry, said, “This is what happens when family get involved!” Mrs May telephoned Ms Smith, and handed the phone to Mr Manga. Ms Smith was, according to Mr Manga, again very aggressive. Amongst other things, she said to him: “You better be careful. You don’t know who you are talking to.” The probabilities are that this was a reference by Ms Smith (who did not give evidence) to her former position as a commissioner of the applicant. However that may be, Mr Manga said that he was “somewhat shaken” by Ms Smith’s comment. A few moments later, Mr Manga handed Mrs May $2,050 in cash, and gave her back her old vacuum cleaner. He took the new vacuum cleaner, and accessories, and left Mrs May’s house.

80    Since the events described above, Mrs May has continued to use her old vacuum cleaner, and it has been “working well” for her. She has not again seen the spark to which Mr Manga had drawn her attention.

81    When she gave evidence in this proceeding, Mrs May was 95 years of age. Although apparently frail, Mrs May was lucid, and clear in discriminating between things which she recalled and things of which she had no recollection. Although she did not give evidence about (and admitted that she did not recall) every aspect of the conversation which she had over a period of 1½ hours with Mr Manga, her handling of the subject under cross-examination left me with the impression that her recollection of these events about two years ago was no different from what might have been expected of any witness, of any age, in comparable circumstances. She struck me as a person of her own mind, an impression which was consistent with the fact that she was in the habit of making her own decisions with respect to consumer goods that she purchased, with respect to bank accounts and the like. Although she was elderly, there was nothing in the evidence about her encounter with Mr Manga, or in her presentation in the witness box generally, which would sustain the conclusion that her age as such placed her at a disadvantage on 23 September 2010.

82    The applicant submitted that the respondent “engaged in unfair and pressure sales tactics which placed Mrs May in an unfair bargaining position”. In part that submission was based on Mr Manga having told Mrs May that her existing vacuum cleaner was dangerous, a circumstance which I am not prepared to accept. In part it was based upon Mr Manga having stayed in Mrs May’s home for more than one hour, in contravention of s 62B of the Fair Trading Act 1999 (Vic) (“the FT Act (V)). I shall deal with that legislation below. Otherwise, the period of about 1½ hours during which Mr Manga was with Mrs May was consistent with the time that he generally found it necessary to go through all the stages involved in a transaction in which the householder ultimately purchased a new vacuum cleaner and also, it seems, with the time that the respondent’s other representatives spent on such transactions.

83    The applicant relied upon the fact that Mrs May had asked Mr Manga several times what was the price of the vacuum cleaner which he was demonstrating, and he did not respond. That might have been discourteous, but, if (as seems plausible) it was a conscious element of Mr Manga’s sales routine to leave any discussion of price until the end of the demonstration, that was, surely, a matter for him. That approach could not be regarded as an unfair sales tactic, since Mrs May was informed of the price before she committed herself to the purchase. Indeed, she then proceeded to bargain with Mr Manga by ambling and protesting for quite a while, the result of which was that Mr Manga brought his original price down by $600 or thereabouts. In so doing, Mrs May demonstrated that she was in a position of some bargaining strength relative to Mr Manga. Whatever view be taken about bargaining strength, however, it could not be said that there was such an imbalance in favour of Mr Manga as would contribute materially to a finding of unconscionability under s 51AB.

84    Section 62B(1) of the FT Act (V) provides as follows (omitting the penalty provisions):

Subject to subsection (2), a supplier or person acting on behalf of a supplier who is carrying on negotiations at a premises which may lead to a contact sales agreement or for an incidental or related purpose must not remain on the premises for more than one hour.

This provision does not apply if the representative of the supplier obtains the written consent of the other person to the former remaining for a longer period than that for which the subsection provides, but then only for one half-hour in relation to each consent. In the case of Mr Manga’s visit to Mrs May’s home, there was no consent. He did, in the circumstances, contravene s 62B(1). Further, by s 62E(a) of the FT Act (V), Mr Manga was obliged to inform Mrs May, orally, that he was not permitted to remain on her premises for more than an hour without her written consent. He did not so inform her. There was, therefore, a breach of s 62E also on the part of Mr Manga.

85    While I would not suggest that these breaches of the FT Act (V) by Mr Manga were technical or nominal only (and that was not submitted by the respondent), it is very difficult to appreciate how the breaches might have been significant to the actual course of the interaction as between him and Mrs May. The whole visit occupied about 1½ hours, but neither witness gave evidence as to the stage that things had reached after the first hour. If, as seems probable, Mr Manga was by then at or near the end of his demonstration, I doubt that Mrs May would have withheld her consent to his presence for a further half-hour to bring matters to a conclusion one way or the other, had the terms of the legislation been followed to the letter. There is nothing in the evidence to suggest that Mr Manga’s presence beyond the first hour placed added, unfair, pressure upon Mrs May, or strengthened his bargaining position relative to hers, or contributed in any material way to the facts, to the extent that there were any, which tended to justify a characterisation of his conduct as unconscionable.

86    With respect to s 51AB(2) of the TP Act, I have dealt with para (a) above, I would answer the questions posed by paras (b) and (c) in the negative and the affirmative respectively (no submission to the contrary having been made on behalf of the applicant) and I have already dealt with para (e) in the general part of these reasons. As to para (d), for reasons stated above, I am not persuaded that Mr Manga employed any unfair or pressure sales tactics in relation to Mrs May.

87    In my view, the circumstances attending the visit of Mr Manga to Mrs May’s home, and his conduct in connection with the supply to her of a new vacuum cleaner, could not be characterised as morally tainted in the sense explained in the authorities so as to justify a finding that that conduct was unconscionable.

88    Jean Powell did not give evidence, but her son John gave some evidence about her circumstances. When he swore his affidavit of 26 July 2012, his mother was 95 years of age. Mr Powell himself, at 58 years, was the youngest of three children. Mrs Powell’s husband died in about 1971 and, since about 1972 or 1973 when Mr Powell himself left the family home, Mrs Powell had always lived alone. Since 9 April 2008, Mr Powell had held a Power of Attorney and an Enduring Guardianship in respect of his mother. From then, he took an active role in his mother’s care, visiting her about once every two months, and speaking with her by telephone about twice a week.

89    Every year since about 2007, an aged care assessment team assessed Mrs Powell to determine whether she was capable of continuing to live on her own. Such an assessment was carried out in July 2010 (the timing of which was, it seems, related to a fall which Mrs Powell sustained either in that, or in the previous, month). In the report which was generated as a result of that assessment, it was recommended that Mrs Powell be provided with “residential care at a low level” for the ensuing 12 months. In that part of the pro forma which inquired whether Mrs Powell needed the help or supervision of another individual, the entry “communication” was left blank. So was the corresponding entry in the part of the pro forma which inquired whether the assessor would recommend that Mrs Powell receive services in respect of particular activities. In the section requiring the assessor to give “specific details relating to functional and activity profile”, the following comment was included: “Some cognitive impairment evident however responds appropriately with prompts”. The report, which was exhibited to Mr Powell’s affidavit, was not supported by the evidence of the assessor herself, or otherwise.

90    Since the implementation of these care arrangements, Mr Powell commenced to pay major bills, such as insurance and council rates, on behalf of his mother. He would also remind his mother of any other bills that were due, so that she could pay them with the assistance of a carer who visited her weekly. The carer would then take her to the bank or to the post office as required. Mr Powell said that, even before he commenced taking this active role in the management of his mother’s financial affairs, she would usually consult him if she needed to purchase an item for more than about $200.

91    In recent years, it was Mrs Powell’s carers who cleaned her house when they visited. Mr Powell and his wife also assisted from time to time. He sometimes used her existing “Luxoflex” vacuum cleaner, and, in late 2010, he had “no issue with its functionality”.

92    The respondent’s sales agent who visited Mrs Powell was Daniel Jamie Stanton. Before referring to the evidence of that visit, such as it is, I shall summarise the effect of his evidence with respect to the routine steps which he generally took when he made a visit to householders for the purpose of checking their existing vacuum cleaner and, hopefully from his point of view, of making a sale.

93    Mr Stanton said that he would commence by having a “chat” with the householder. He would ask questions so that he could get a feeling for the person with whom he was dealing. If that person were elderly, he would usually attempt to find out whether he or she made his or her own decisions, or had assistance with decision making. He would ask: “do you do your own shopping?”. Sometimes he would ask whether the householder drove their own car. He might ask whether the householder had someone who helped them buy large household items, such as televisions. If the householder were alone in the house and gave a hint that someone else was in control of their money, or asked the same question about three or four times, Mr Stanton might ask them if anyone held a power of attorney in respect of them. If the householder appeared to be particularly forgetful, was showing signs of dementia or appeared confused, Mr Stanton would be “very cautious”. Then, he would usually do the maintenance check on the existing vacuum cleaner, and leave. He exercised caution in this area because of the distances which he would be required to travel if a sale were later cancelled. In his experience, about 90% of cancellations arose because of the involvement of a third party, such as a son or daughter.

94    Mr Stanton would then ask the householder to plug in their existing vacuum cleaner and turn it on and off. He would then undertake a maintenance check on that machine. This involved checking the hose and pipes to see if they were worn or blocked, checking the filters and seals, opening the compartments, checking the bag to see if it was full, checking the power head and examining the plug to see if there were any exposed wires. He did not need tools to carry out these checks, but, on occasions, he would use a five cent piece to undo a small screw in order to take the power head apart. Mr Stanton would inquire of the customer how they were finding their vacuum cleaner, and whether they felt it was doing an adequate job. If any reservations as to suction were expressed, he would clean the filters, and get the existing vacuum cleaner functioning as best he could. It would be at that stage that he would suggest that he could conduct a comparison test between the existing machine and a demonstration model which he carried with him. He said that he conducted a comparison test in about one in every five appointments.

95    In the comparison test, Mr Stanton would ask the customer to vacuum an area of carpet, and he would then use the demonstration model to re-vacuum the same area. For that purpose, he would always put a new bag in the customer’s existing machine, so that it had the highest suction possible. Inside the demonstration model, there would be a black cloth where the bag usually sat. This would show the amount of dirt that the demonstration model had sucked up from the same area of carpet that had been cleaned by the existing machine. Mr Stanton said that, on average, he would do about 3-4 such comparison tests. Mr Stanton would ask the customer to give their thoughts as to the results of the comparison test. If the response was that the householder was not happy with the way the existing vacuum cleaner was functioning, Mr Stanton would ask whether they might think about changing it over for a new machine. Indeed, he usually gave them the option of continuing with their existing machine, of repairing that machine, or of buying a new machine. If the customer chose to repair the existing machine, Mr Stanton would recommend that they find an electrician for the purpose (and, in a town with which he was familiar, he might suggest an electrician to the householder). According to Mr Stanton, if the customer indicated that they were happy with their existing machine, then he would never “push a sale”.

96    Mr Stanton attended at Mrs Powell’s house on 15 February 2011. He assumed that this appointment would have been arranged a few days previously by the respondent. At least at the general level, and in some respects at the level of detail, Mr Stanton claimed to have a good actual recollection of what transpired on that occasion. Although there were some uncertainties in his evidence, and some disparities as between his affidavit and his oral evidence, to the extent that he was able to give concrete evidence of the interactions which he had with Mrs Powell, I have no reason not to accept that evidence. This is particularly so in the absence of any evidence from Mrs Powell herself about the occasion.

97    Mr Stanton said that he could recall Mrs Powell’s house. It was “a little, small cottage-type style house”. There was a cat sleeping on a chair at the front door. When Mrs Powell came to the door, Mr Stanton introduced himself, confirmed that he had an appointment, and said that he worked for the respondent. Inside the house, Mrs Powell had her vacuum cleaner, which was an upright model, ready for checking. Mr Stanton went through the process of checking the machine, according to his routine. Having checked Mrs Powell’s vacuum cleaner, Mr Stanton suggested that he install new filters in it. He had a vague recollection that Mrs Powell may have said that she required new bags for her machine. In his evidence, Mr Stanton said that Mrs Powell’s vacuum cleaner was in “quite good”, but not “excellent”, condition, and he told her so. It was, according to him, “an average machine.”

98    Mrs Powell told Mr Stanton that she found her existing vacuum cleaner quite heavy, and asked him if there was a lighter machine. He answered in the affirmative. He thought that Mrs Powell may have asked to see the new lighter model, but, whether or not for that reason, the fact is that Mr Stanton retrieved a demonstration model of a Lux Kobold vacuum cleaner from his vehicle, which he then used in a comparison test with Mrs Powell’s existing vacuum cleaner. He “did” two or three cloths, and Mrs Powell said that she “didn’t like what she saw coming out of the carpet”.

99    Mrs Powell and Mr Stanton discussed the price of a new vacuum cleaner. Mr Stanton said that Mrs Powell “would have asked the price.” He had a feeling that she asked if she could trade in her old machine, to which he said that the respondent no longer did trade-ins. Beyond that, Mr Stanton said that he could not recall the detail of any discussion about prices. However, he did tell her that the price of a new machine would be $1750, and Mrs Powell agreed to buy one at that price. According to him, she said, “Yes, I would like to get one.” She then asked about payment, to which Mr Stanton said, “We don’t take money on the day”. He then gave her an idea of the ways in which she could pay for the new vacuum cleaner. At some point during their conversation, Mr Stanton asked Mrs Powell whether there was any other person who she would like to be there, or to whom she would like to speak, and was told that there was not. He also asked Mrs Powell whether she did her own shopping, and she said she did; and whether she had given anyone a power of attorney, and she said that she had, but she handled all her own business, her attorney making decisions for her only in emergency situations.

100    Once Mrs Powell had decided to buy a new vacuum cleaner, Mr Stanton retrieved the machine in question (which was not the demonstration model which he had been using) and the necessary paperwork from his vehicle. Mr Stanton went through “the whole running of the machine” with Mrs Powell. She tried the new machine herself and, according to Mr Stanton, “was very happy with it”.

101    During the completion of the paperwork, Mr Stanton asked Mrs Powell again whether “there was anybody that she would have needed to be there, like to buy the machine on the day” and she responded that there was not any need for anyone to be there. Then they completed the paperwork. The contract contained the following endorsement, just above where Mrs Powell signed:

THIS CONTRACT IS SUBJECT TO A COOLING OFF PERIOD OF TEN DAYS.

Mrs Powell opted to pay by bank cheque and, at the end of their meeting that day, Mr Stanton left a remittance advice and an envelope for her later use to send the purchase money to the respondent. Although not by way of trade-in, by agreement with Mrs Powell, Mr Stanton took her old machine with him when he left her house.

102    On the assumption that the court would accept the evidence of Mr Stanton, there was very little that the applicant could put in support of its case that his conduct at Mrs Powell’s house was unconscionable (that is, additionally to the institutional factors to which I have referred at paras 11-32 above). It was submitted that “Mr Stanton should have at least been aware that there was a risk that Mrs Powell was a vulnerable consumer”. The word “vulnerable” is in itself tendentious, of course, rather than descriptive of some observable, objective, human condition. Even so, there was nothing in the evidence to give the slightest impression that Mr Stanton did not pay appropriate regard to Mrs Powell’s circumstances, including her age, in his dealings with her. Indeed, if Mr Stanton is to be believed, it was Mrs Powell who first opened a line of conversation which introduced the prospect of her buying a new vacuum cleaner (when she asked Mr Stanton if there was a lighter machine). The applicant’s submission that Mr Stanton engaged in unfair and pressure sales tactics must, on the evidence of Mr Stanton, be rejected.

103    But the applicant submitted that much of Mr Stanton’s evidence should not be accepted. It first argued that, where his evidence was inconsistent with that of Mr Powell, the latter should be accepted. There was, however, no respect in which the evidence of these two witnesses dealt directly with the same facts. Mr Powell was not present at his mother’s home on 15 February 2011.

104    Otherwise, the applicant’s attacks on Mr Stanton’s credibility amounted to glancing blows at best. It was pointed out that, in some areas of detail, his oral evidence did not align with what he had said in his affidavit. That was so, and, in my recitation of the substance of his evidence above, I have, where there was such an inconsistency, relied on the oral version. I had the distinct impression that Mr Stanton’s affidavit was (as frequently occurs) the result of the attentions of the respondent’s legal advisers. Whether or not that be so, when it became apparent that Mr Stanton was not as familiar with the detailed terms of his own affidavit as a deponent should ideally be, I invited him to recount, from his direct recollection, the course of events, and of his conversation with Mrs Powell, on 15 February 2011. In doing so, on occasion he succumbed to the temptation of saying what “would” have happened at a particular point. That was, however, not a sign of a witness trying to avoid the truth, but a natural human tendency to see past events in the light of his own common experiences in the occupation in which he worked. I take account of that tendency, but I also accept the respondent’s submission that, in cases of the kind now before the court, some weight should be given to the adoption by its representatives, including Mr Stanton, of a systematic, routine, procedure in the normal working circumstances of such an occupation.

105    The applicant invited me to note that Mr Stanton’s evidence under cross-examination was given in “a generally evasive manner”, and involved pauses and hesitations which ought not to have been necessary. I do not accept that criticism of Mr Stanton. There were pauses – “hesitations” if a pejorative description be preferred – but these were, in my observation, nothing more than signs of the care with which the witness received counsel’s questions and marshalled his thoughts for the correct answers.

106    Mrs Powell herself not having given evidence, and Mr Stanton’s evidence having been substantially accepted, there is no factual basis for the court to find that his conduct at Mrs Powell’s home on 15 February 2011 was unconscionable.

107    With respect to para (a) of s 21(2) of the AC Law, aside from the high-level considerations to which I have referred, there is no evidence to warrant the conclusion that Mr Stanton occupied a position of greater bargaining strength than that of Mrs Powell; or, if he did, that he made use of that position unconscionably to the disadvantage of Mrs Powell. Neither is there any evidence of unfair tactics having been employed by Mr Stanton. I would answer the questions in paras (b) and (c) of s 21(2) in the negative and affirmative respectively. And, as I have held earlier, there was no vacuum cleaner for sale elsewhere that was the equivalent of the Kobold model bought by Mrs Powell.

108    On the evidence, I could not find that Mr Stanton’s conduct at Mrs Powell’s home was morally tainted in the sense conveyed by the authorities. I reject the applicant’s case under s 21 of the AC Law with respect to Mrs Powell.

109    Margaret Baird was 89 years old in July 2011. She had lived alone at her then address since about 1987. She was in receipt of a war widow’s pension, and, it seems, an associated service which she received from the Department of Veterans’ Affairs was cleaning her house for her, which was done every fortnight by contract cleaners. At the date which is relevant to this proceeding, the cleaner who came to assist her was a man called Vincent. In between Vincent’s fortnightly visits, Mrs Baird also did some cleaning as required.

110    Mrs Baird had purchased a Lux vacuum cleaner more than 10 years previously for a price which, by her recollection, was “about $300”. This vacuum cleaner was working well for Mrs Baird in 2011, and Vincent had never said that there was anything wrong with it. She had not considered replacing it or having it serviced.

111    In early July 2011, a representative of the respondent telephoned Mrs Baird, and referred to the fact that she owned a Lux vacuum cleaner. Mrs Baird thought that the call was from the agent himself who proposed that he should visit her at home “to conduct a free service”. Mrs Baird agreed that he could do so, adding, “[b]ut I am not going to buy a new one”. The agent who subsequently visited Mrs Baird was Greg Farquhar. In his evidence, he explained his normal routine when making a service call of this kind, and I shall refer to that evidence before turning to the specifics of his attendance at Mrs Baird’s home.

112    When Mr Farquhar arrived at the householder’s home and introduced himself, he commenced the maintenance/efficiency check on the householder’s vacuum cleaner by plugging the machine in and turning it on. He checked the basic construction of the machine, including the hoses and pipes for blockages, the motor for dust and the suspension frame for cracks and noisy bearings. He checked the filters, the bags and the effectiveness of the suction of the machine. On about half of the visits which he made, he carried out a comparison test of the householder’s machine against a demonstration model which he carried in his vehicle. He would not perform a comparison test if, for example, the existing machine was in good working order, or if there was some other reason making such a test inappropriate. In the comparison test, Mr Farquhar’s practice was to vacuum a small area of carpet with the existing machine, and then to re-vacuum the same area with the demonstration model. Inside the demonstration model, there was a black cloth which would show how much dirt, left behind by the existing machine, was collected by the demonstration model. There might be a considerable amount of dirt on the black cloth either because the existing machine was tired or worn out, or because the new machine simply worked more efficiently than an older model.

113    According to Mr Farquhar, on average, a householder would decide to purchase a new vacuum cleaner approximately once in every four demonstrations. Mr Farquhar would usually offer the householder a discount, or a trade-in on their existing vacuum cleaner. If the householder decided to buy a new machine, Mr Farquhar would retrieve it from his vehicle, and complete the respondent’s paperwork for the sale. Mr Farquhar said that he took particular care when finalising a sale to an elderly householder, by asking them whether they needed to consult with anyone else prior to signing the paperwork, and by asking such questions as whether they did their own shopping, and whether they made their own financial decisions.

114    Mr Farquhar visited Mrs Baird at her home at about 1:00 pm on 5 July 2011. Mrs Baird showed him her existing vacuum cleaner and, according to her affidavit, “he looked at it briefly”. Under cross-examination, however, it became clear that Mrs Baird had little recollection of what Mr Farquhar was actually doing at this point, and that there was little if any content in her observation that his inspection of her machine was brief. The respondent submitted that the probability was that Mr Farquhar followed his standard routine, and I would accept that. In her affidavit, Mrs Baird said that Mr Farquhar did not tell her that anything specific was wrong with her vacuum cleaner, but asked if he could show her “a new vacuum cleaner that is much better than this one”. Again under cross-examination, however, Mrs Baird agreed that the effect of what Mr Farquhar had said at this point was that he would give her machine an efficiency test, which would show her (and here I quote the words of cross-examining counsel which were accepted by Mrs Baird) “the sort of job that your old vacuum cleaner is doing”. Mrs Baird agreed to that, whereupon Mr Farquhar retrieved a Lux Sora Royal demonstration model vacuum cleaner from his vehicle, and brought it into Mrs Baird’s home.

115    Mr Farquhar demonstrated the new vacuum cleaner, and the range of attachments which came with it. Mrs Baird could not recall him using her vacuum cleaner on a section of carpet, and then vacuuming the same section with the demonstration model, but she could recall the procedure involving the black cloth, and accepted that, in a couple of locations in her unit, Mr Farquhar had been able to demonstrate to her the presence of dirt collected on the cloth from a section of floor that had been cleaned with her existing machine. That did not trouble Mrs Baird, as she had “had that sort of demonstration before”. Indeed, it was after that demonstration that Mrs Baird said, or reiterated, that she was not interested in buying a new vacuum cleaner because her existing one worked fine.

116    During the course of the demonstration, Mrs Baird asked Mr Farquhar about the price of a new vacuum cleaner. By her clear recollection, she asked him this question several times, but the only response which she received was “[d]on’t worry, I’ll give you $300 off”. Mr Farquhar did not recall Mrs Baird’s inquiries about price, but accepted that he may have “delayed telling her the price of the new Lux machine at the first enquiry to try and demonstrate the benefits of the new vacuum cleaner further”.

117    At one point, Mrs Baird told Mr Farquhar that she could go to Godfreys for a vacuum cleaner. According to her evidence, his response was that the Lux vacuum cleaner which he was selling was not available in shops, and that the vacuum cleaners available from Godfreys were “no good” and that “they will fall to pieces”. Mr Farquhar’s evidence on the latter aspect was that he “would not have” said that vacuum cleaners that could be bought from retail stores would fall to pieces, but that he “would have” told her that the cheaper vacuum cleaners were not well made, that the suction could drop off quickly and that the PVC plastic might crack after use. Under cross-examination, Mrs Baird accepted that Mr Farquhar had said that the cheaper vacuum cleaners on sale at Godfreys were no good, but (although she could not recall the detail of this aspect of the conversation) insisted that what Mr Farquhar implied was that vacuum cleaners generally at Godfreys were no good. It seems established that, in response to Mrs Baird’s comment that she could buy a vacuum cleaner at Godfreys, Mr Farquhar made a disparaging observation at least about the “cheaper” vacuum cleaners available there. In a context in which Mrs Baird was introducing the possibility of a purchase as an alternative to doing to business with Mr Farquhar, it strikes me as not only reasonable but most probable that his words would have been understood by her as referring to vacuum cleaners that were cheaper than the respondent’s machine.

118    After the demonstration, Mrs Baird felt it was too late for her to say that she was not going to purchase the new vacuum cleaner, “because he had unpacked everything out of the box”. In her affidavit, she said: “I felt that it would be too hard for him to pack it all back up and I did not feel comfortable asking him to box it up and leave.” Mr Farquhar handed Mrs Baird some paperwork for the purchase of the new vacuum cleaner and, she said in her evidence, “I felt like I had already agreed to buy it”. She told him that, if he thought she needed the new vacuum cleaner, she would buy it. Mr Farquhar said the new vacuum cleaner would cost $2,270, which included the $300 discount that he had mentioned, and a trade-in on her old vacuum cleaner. Mrs Baird was shocked by that price, and told Mr Farquhar that it was “very expensive”. But she felt that, by then, she was “too far in” and that there was no way for her to turn around and back out of the purchase at that stage. That was because Mr Farquhar had gone to the trouble of unpacking the new vacuum cleaner, and had already started filling in the paperwork.

119    Mr Farquhar asked Mrs Baird whether she needed to call a family member before buying the new vacuum cleaner, and she responded that no-one was available at that time, as they were “all away”. In her oral evidence, Mrs Baird made it clear that this meant they were all outside Australia. However, she accepted that not all of her four children and eight grandchildren were out of Australia at the time.

120    Mrs Baird and Mr Farquhar then executed the respondent’s standard form contract for the purchase of a Sora Royal vacuum cleaner, and hose kit, for $2,270.00. The “due date” for this sum was shown as 20 July 211. Immediately above where the contract was signed by Mrs Baird was the following endorsement:

important notice to the purchaser.

you have a right to cancel this agreement within ten (10) days from and including the day you signed the contract. important details about your rights are set out in the cancellation notice provided with this agreement.

The arrangement which Mrs Baird made with Mr Farquhar was that she would pay for the vacuum cleaner by transfer from her bank account, the details of which she provided to Mr Farquhar. She does not recall him mentioning anything about a cooling-off period, but he did say that it would be a number of days until the money was taken out of her account.

121    Later in the same day, Mrs Baird looked at all the different accessories that came with the new vacuum cleaner, and realised that she did not know what most of them were for. She felt foolish for having purchased an expensive vacuum cleaner that she did not know how to use fully. About a week later, Vincent came to clean Mrs Baird’s house. She said to him “I have a new toy for you”. However, he did not see the new arrival in that light. Indeed, he told Mrs Baird that he was not going to use it. He asked her, and she informed him, how much she had paid for this vacuum cleaner. A day or so later, Mrs Baird also informed a lady called Jenny, who sold Avon products in that area, how much she had paid for the vacuum cleaner. After that, Jenny made a telephone call, and then informed Mrs Baird that the respondent would organise a refund for her.

122    A few days later, a lady from the respondent called Mrs Baird. She was very friendly, and told Mrs Baird that the respondent would give her her money back, and return her old vacuum cleaner. Later, someone from the respondent did call at Mrs Baird’s house, and took away the new vacuum cleaner which she had purchased. He returned an old vacuum cleaner to her which, although it was not the very vacuum cleaner which she previously owned, was the same model.

123    It was not until 20 July 2011 that the sum of $2,270 was withdrawn from Mrs Baird’s bank account by the respondent. That sum was re-deposited into Mrs Baird’s account on 25 July 2011.

124    Mrs Baird, who was nearly 91 years old when she gave evidence, had a reasonable command of the matters about she which she was questioned. She was vague in a number of areas of detail, and it transpired that, in some respects, her evidence in chief as set out in her affidavit had been somewhat more categorical, and somewhat more detailed, than her actual recollection justified. Further, in a number of respects, she was readily prevailed upon by cross-examining counsel to accept qualifications and additions to that evidence in chief. From the way she presented in the witness box, I am satisfied that her personality and nature was such that she might well have been reluctant to send Mr Farquhar on his way empty handed after he had gone to so much trouble demonstrating the new vacuum cleaner to her, with all of its attachments. Although Mrs Baird did not put it as high as to suggest that Mr Farquhar had talked her into something which she did not need, I accept her evidence that the length of the period during which Mr Farquhar was in her house (about 1½ hours), the trouble to which he had gone to emphasise the strong points of the respondent’s machine, and the dynamics of the interactions between him and her generally, were such as, in effect, to push her over the edge of deciding to replace what was in any event an old vacuum cleaner with a new model which, in the cold light of day, she readily perceived to be more elaborate, more complicated and far more expensive than her needs required.

125    The applicant submitted that the respondent had “engaged in unfair and pressure sales tactics which placed Mrs Baird in an unfair bargaining position and … exploited this position”. Exactly what were the “unfair and pressure sales tactics” employed by Mr Farquhar were not, however, the subject of any specific submission. The applicant may have been referring to Mr Farquhar’s refusal to inform Mrs Baird of the price of the new machine until after the demonstration was completed. If so, I would not regard this as an unfair or pressure sales tactic. If he so chooses, a salesman is entitled to complete the demonstration of his wares before inviting the prospective buyer to consider parting with a specific sum of money. The applicant may have been referring to Mr Farquhar’s conducting of a comparison test that inevitably showed up Mrs Baird’s existing cleaner in a bad light. That was neither unfair nor pressurising. It was what Mr Farquhar had offered to do, and what Mrs Baird had accepted. The applicant may have been referring to Mr Farquhar not discussing the possibility of Mrs Baird’s existing vacuum cleaner being repaired. If so, the matter was not put to Mr Farquhar under cross-examination and in any event, the shortcomings in the existing machine which Mr Farquhar’s demonstration revealed were not shown to have been such as required “repair”, or which could have been rectified thereby. The applicant may have been referring to the discount which Mr Farquhar offered Mrs Baird on her purchase of the new vacuum cleaner. If so, I would, for reasons explained above, regard this as a legitimate aspect of the interchange which took place in relation to the purchase which was clearly by then in contemplation. The applicant may have been referring to the fact that Mr Farquhar was in Mrs Baird’s home for about 1½ hours, thereby having time to wear down her resistance to the purchase of a new vacuum cleaner. But, as referred to earlier, that seems to have been about the time it took the respondent’s representatives generally to go through all the steps necessary to conduct a sale. There was, in my view, no sense of “wearing the householder down” in Mr Farquhar’s transactions with Mrs Baird.

126    A circumstance which places Mrs Baird’s circumstances apart from those of the other householders with which the case is concerned is that she knew from the outset, apparently, that the sale of a new vacuum cleaner was at least one possible purpose of Mr Farquhar’s visit to her home. She told the respondent’s representative who contacted her to make the appointment for Mr Farquhar’s visit that she was not going to buy a new vacuum cleaner. When Mr Farquhar arrived at her home, she appreciated, therefore, that an attempted sale might be in prospect. Yet she appears to have offered no resistance to Mr Farquhar’s suggestion that he show her the job being done by her existing machine by reference to the demonstration model which he had in his vehicle.

127    Mrs Baird was also aware that she could go to Godfreys for a new vacuum cleaner. The applicant was critical of Mr Farquhar for his disparagement of the machines available from Godfreys, but I am disposed to think that his comment, while perhaps unfair to the respondent’s competitors, would have been perceived by Mrs Baird as sales talk, in the nature of negative puffery. It was not, after all, her later realisation that she could have done better at Godfreys that caused her to regret her purchase: it was that she did not need a cleaner with the accessories that the respondent’s machine had, at all. But the discussion about Godfreys indicated that Mrs Baird was not an innocent in the matter of vacuum cleaners: it was, after all, she who had volunteered the rather confronting observation that she could get a vacuum cleaner from Godfreys instead of buying the one that Mr Farquhar was in the course of demonstrating.

128    I accept that Mrs Baird made her purchase because Mr Farquhar’s demonstration was so involved, and so elaborate, that she felt uncomfortable about sending him on his way without a sale. But she appears to have come to that position quite late in the piece since, at the point where Mr Farquhar showed her the dirt on his black cloth, her position was still that she did not want a new vacuum cleaner because her existing one worked fine. Perhaps Mrs Baird became caught up in the momentum towards a purchase created by the demonstration and by Mr Farquhar’s sales task generally. But that is why the law – reflected in the respondent’s contract – provides for cooling-off periods. People of all ages sometimes have second thoughts. A sale should not generally be regarded as having been achieved by unconscionable conduct merely for the reason that the purchaser has, in effect, been persuaded to proceed against his or her own better judgment when it is a specific term of the contract that the purchaser has the right to cancel within the cooling-off period.

129    The applicant also relied on what was said to have been a breach by Mr Farquhar of s 74 of the AC Law, which provides:

A dealer who calls on a person for the purpose of negotiating an unsolicited consumer agreement, or for an incidental or related purpose, must, as soon as practicable and in any event before starting to negotiate:

(a)    clearly advise the person that the dealer’s purpose is to seek the person’s agreement to a supply of the goods or services concerned; and

(b)    clearly advise the person that the dealer is obliged to leave the premises immediately on request; and

(c)    provide to the person such information relating to the dealer’s identity as is prescribed by the regulations.

It was said that Mr Farquhar did not, as soon as practicable or in any event before he started to negotiate with Mrs Baird, advise her that his purpose was to seek her agreement to the supply of a new vacuum cleaner or that he was obliged to leave her home immediately on request. It is true that Mr Farquhar contravened s 74 in these respects. But I think it unlikely that those derelictions had any impact upon the dynamics of the interactions between him and Mrs Baird, or make any real contribution to the resolution of the question arising under s 21. Although Mrs Baird was perhaps led to the point of being prepared to make a purchase over a period of time, she initially showed no reluctance to having Mr Farquhar bring a demonstration model into her house, and she proceeded to engage in quite a lively discourse with him about the purchasing options that were open to her. I doubt that it would have made any difference at all for her to have been told, at the outset, that his purpose was to make a sale of a new vacuum cleaner, or that he would have to quit her premises upon request. In short, in deciding the matter which arises under s 21 of the AC Law, I am not assisted by the circumstance that Mr Farquhar proceeded in breach of s 74.

130    In Mrs Baird’s case, I have nothing to add with respect to s 21(2)(a) of the AC Law beyond what I have said in relation to the other householders involved in the applicant’s claim. I would answer the questions posed by paras (b) and (c) of the subsection in the negative and the affirmative respectively. For reasons stated above, I would answer the question in para (d) in the negative. And, as explained above, I am not satisfied that there was, available from another supplier, a vacuum cleaner the equivalent of that purchased by Mrs Baird.

131    Taking everything into account, including Mrs Baird’s contractual right to cancel her purchase within the cooling-off period, I take the view that the respondent’s conduct in her case could not be described as unconscionable within the meaning of the authorities to which I have referred.

132    It follows from my reasons above that the application must be dismissed. I am not aware of any circumstance that would make the usual costs order inappropriate but, lest there be any, I shall give the parties liberty to apply within 14 days, and stay the operation of my costs order accordingly.

Associate:

Dated:    8 February 2013