FEDERAL COURT OF AUSTRALIA

[2000] FCA 1376

Australian Competition and Consumer Commission

 v

CG Berbatis Holdings Pty Ltd (ACN 008 799 040)

Summary

This summary is published to assist in understanding the judgment.  It does not form part of the judgment.

1                     In this case the owners of a shopping centre are said to have contravened the law by requiring that various of their tenants abandon claims against the owners in the Commercial Tribunal if they wanted their leases renewed.  The conduct complained of took place in 1996 and 1997.  The law which the owners are said to have broken is s 51AA of the Trade Practices Act 1974.  That section prohibits conduct by companies in trade or commerce that is unconscionable within the meaning of the unwritten law.  The conduct which is prohibited by that section is therefore limited to what is unconscionable conduct according to particular doctrines of the unwritten or judge-made law.  The unconscionable conduct prohibited by the section is confined to that which would be actionable in equity. 

2                     In 1998 a new s 51AC was introduced into the Act which prohibited unconscionable conduct without the same limits as s 51AA.

3                     In this case, which has to be decided under s 51AA, I have found that the owners of Farrington Fayre and their representative, Brian Sullivan and his company, engaged in unconscionable conduct in relation to one of their tenants, Mr and Mrs Roberts, who wished to sell their business, the Leeming Fish Supply, and needed a new lease for that purpose in 1996 as their existing lease was due to expire in February 1997.  Mr and Mrs Roberts stood to lose the opportunity to sell their business at what was a difficult personal time for them.  Their vulnerability was known to the owners, and they were forced to sign a release of claims against them before a new lease would be granted.

4                     The ACCC has alleged that the owners also engaged in unconscionable conduct in relation to two other tenants.  But the situation with respect to those tenants was different, both in terms of their relative disadvantage and in terms of the detailed circumstances of their case.  I was therefore not prepared to find that the owners had contravened s 51AA in relation to those tenants. 

5                     This case turns on the limited scope of s 51AA.  It may be that a different result could have obtained under the later and wider provisions of s 51AC.  That question will have to await another day and another case.

6                     I propose to make declarations to give effect to my findings and to allow the ACCC and the respondents time to propose further orders and to file submissions about costs.