FEDERAL COURT OF AUSTRALIA
Australian Competition and Consumer Commission v BAJV Pty Ltd
[2013] FCA 666
IN THE FEDERAL COURT OF AUSTRALIA | |
tasmania DISTRICT REGISTRY | |
AUSTRALIAN COMPETITION AND CONSUMER COMMISSION Applicant | |
AND: | BAJV PTY LTD (ACN 094 966 953) First Respondent BRENDON AYERS Second Respondent TERESSA CARR Third Respondent |
DATE OF ORDER: | |
WHERE MADE: |
THE COURT DECLARES THAT:
1. From about December 2006 until February 2012, in the course of managing the repair of rental vehicles, by engaging in conduct that had the following components:
1.1. where a person who had rented a BAJV vehicle and who failed to return the rented vehicle in the same condition as when it was rented (Rental Customer) paid to BAJV the amount contained in a tax invoice issued by BAJV to the Rental Customer (Damage Charge) in respect of damage caused, or alleged by BAJV to have been caused, to its rental vehicle (Damage) and the amount paid by BAJV to a repairer or parts supplier in respect of accidental damage to a vehicle (Cost of Repair) was less than the Damage Charge paid;
1.2. BAJV would often not contact the Rental Customer to notify them of that lower Cost of Repair;
1.3. BAJV would often not notify the Rental Customer that a refund was due; and
1.4. BAJV would often not process a refund to the Rental Customer without first receiving an enquiry from the Rental Customer about whether any refund was payable to them (Non-Refund Practice),
BAJV, in trade or commerce, engaged in conduct that was misleading or deceptive or likely to mislead or deceive, in contravention of section 52 of the Trade Practices Act 1974 (TPA) and section 18 of the Australian Consumer Law (ACL).
2. By from about December 2006 until February 2012:
2.1. maintaining a set of standard charges for items or types of damage (Standard Charges), which nearly always exceeded the likely Cost of Repair for the items or types of damage;
2.2. directing its employees to apply the Standard Charges when charging Rental Customers for Damage of that kind; and
2.3. in the event that the Cost of Repair was less than the Damage Charge, nearly always failing to refund the difference between the Cost of Repair and that Damage Charge,
BAJV, in trade or commerce, engaged in conduct which was misleading or deceptive or likely to mislead or deceive, in contravention of section 52 of the TPA and section 18 of the ACL.
3. By employing the following practices from about December 2006 until February 2012 where vehicles were returned to BAJV by Rental Customers with accidental damage that was capable of being repaired by on-site repairers (Minor Damage):
3.1. charging the Rental Customers a Damage Charge by reference to a purported repair cost, including by reference to the Standard Charges;
3.2. where the Minor Damage consisted of dents and scrapes, not having each instance of Minor Damage repaired alone;
3.3. sometimes waiting until the vehicle had incurred several incidences of minor Damage and then having multiple repairs conducted at one time for a lower Cost of Repair than the total of the Damage Charges charged to the Rental Customers for those several incidences of Minor Damage; and
3.4. when the Cost of Repair in respect of each incident of Minor Damage was less than the Damage Charge charged to the Rental Customer, failing to refund the difference between the Cost of Repair and the Damage Charge,
BAJV, in trade or commerce, engaged in conduct which was misleading or deceptive or likely to mislead or deceive, in contravention of section 52 of the TPA and section 18 of the ACL.
4. By employing the following practices from about December 2006 until February 2012 where vehicles were returned to BAJV by Rental Customers having been involved in accidents with third parties:
4.1. charging the Rental Customers the full amount of the Damage Liability Fee, irrespective of:
4.1.1. the nature and extent of the Damage and the cost or estimated cost to repair it;
4.1.2. whether or not the Rental Customer was at fault in the accident;
4.1.3. the extent of the damage to the third party's property;
4.2. retaining the sum charged:
4.2.1. irrespective of the Cost of Repair; and
4.2.2. even where the third party was at fault, in circumstances where the third party had not confirmed that it made no claim against BAJV;
4.3. having a general policy that the sum charged be retained for 7 years, in cases where BAJV considered that there was a possibility of a claim being made by a third party which had not crystallised at that stage; and
4.4. not creating any entry in its accounting records or employing any system that would have the effect of processing any refund in a timely manner to the Rental Customer,
BAJV, in trade or commerce, engaged in conduct which was misleading or deceptive or likely to mislead or deceive, in contravention of section 52 of the TPA and section 18 of the ACL.
5. From about December 2006 until February 2012, by implementing the following practice (Two Invoice Practice) in relation to the repair of rental vehicles that were for repair by off-site repairers Booths Bodyworks, FT Guy Bodyworks and Cramps Bros Bodyworks:
5.1. receiving from the repairer two invoices, each for a different amount in respect of the repair of the Damage, the amount specified in the invoice for the lower amount being the amount for payment by BAJV; and
5.2. using the invoice for the higher amount in support of representations to its rental customers, or third parties from whom BAJV was claiming payment in respect of the Damage, that the Cost of Repair was the amount specified in the Higher Invoice,
BAJV, in trade or commerce, engaged in conduct which was misleading or deceptive or likely to mislead or deceive, in contravention of section 52 of the TPA and section 18 of the ACL.
6. From about December 2006 to at least February 2012, in circumstances where the persons listed in Annexure A rented vehicles through BAJV's Europcar Tasmania business (Renters) and returned the vehicles with Damage, BAJV, in trade or commerce:
6.1. by representing that each of the Renters was liable to BAJV for:
6.1.1. the Damage Charge as set out in the Damage Letter and/or tax invoice provided by BAJV to that Renter; and
6.1.2. the Damage Charge which would be the Cost of Repair,
when this was not the case,
6.1.3. engaged in conduct that was misleading or deceptive or likely to mislead or deceive, in contravention of section 52 of the TPA; and
6.1.4. in connection with the supply or possible supply of goods and/or services, made a false or misleading representation with respect to the:
a. price of goods and/or services, in contravention of section 53(e) of the TPA; and
b. existence of a condition, right or remedy in contravention of section 53(g) of the TPA; and
6.2. by representing to Renters that the Cost of Repair was or would be the Damage Charge when this was not the case:
6.2.1. engaged in conduct that was misleading or deceptive or likely to mislead or deceive, in contravention of section 52 of the TPA; and
6.2.2. in connection with the supply or possible supply of goods or services, made a false or misleading representation with respect to the price of goods and/or services, in contravention of section 53(e) of the TPA.
7. From about December 2006 to at least February 2012, by representing to each of the Renters that if the Damage Charge charged to the Renter was greater than the Cost of Repair, BAJV would pay to the Renter an amount calculated by reference to the difference between the Damage Charge and the Cost of Repair, when this was not the case, BAJV, in trade or commerce:
7.1. engaged in conduct that was misleading or deceptive or likely to mislead or deceive, in contravention of section 52 of the TPA; and
7.2. in connection with the supply or possible supply of goods or services, made a false or misleading representation with respect to the:
7.2.1. price of goods and/or services, in contravention of section 53(e) of the TPA; and
7.2.2. existence of a condition, right or remedy in contravention of section 53(g) of the TPA.
8. From at least about 2006 to at least February 2012, by representing to consumers via the Europcar website that:
8.1. a rental customer would not be charged for loss and damage in excess of what was provided for under the terms of the Rental Agreement, when in fact BAJV sometimes did charge rental customers more than it was entitled under the Rental Agreement; and
8.2. if the amount BAJV charged a rental customer for the loss and damage was greater than what it was entitled under its Rental Agreement, the difference would be refunded to the rental customer, when this was not the case,
BAJV, in trade or commerce,
8.3. engaged in conduct that was misleading or deceptive or likely to mislead or deceive, in contravention of section 52 of the TPA and section 18 of the ACL; and
8.4. in connection with the supply or possible supply of goods or services, made a false or misleading representation with respect to the:
8.4.1. price of goods and/or services, in contravention of section 53(e) of the TPA and section 29(1)(i) of the ACL; and
8.4.2. existence of a condition, right or remedy in contravention of section 53(g) of the TPA and section 29(1)(m) of the ACL.
9. From at least about 2006 to at least February 2012, by representing to consumers via the Europcar website that if a Rental Customer is involved in an accident involving the rented vehicle, the maximum amount charged would be a Damage Liability Fee, when this was not the case, BAJV, in trade or commerce:
9.1.1. engaged in conduct that was misleading or deceptive or likely to mislead or deceive, in contravention of section 52 of the TPA and section 18 of the ACL; and
9.1.2. in connection with the supply or possible supply of goods or services, made a false or misleading representation with respect to the price of goods and/or services, in contravention of section 53(e) of the TPA and section 29(1)(i) of the ACL.
10. In circumstances where the following Rental Customers:
10.1. Stuart Moore;
10.2. Justin Tiew;
10.3. customer with rental agreement number 53193631 (Ms M);
10.4. Denis Durham;
10.5. Harry Wood;
10.6. Wilma Baird; and
10.7. Susan Cross,
returned a rental vehicle to BAJV with Damage caused in an accident with a third party, by providing each of these Rental Customers with a tax invoice containing a specified Damage Charge, BAJV represented to the Rental Customer that they were liable to BAJV for the Damage Charge, when this was not the case, and by doing so, in trade or commerce:
10.8. engaged in conduct that was misleading or deceptive or likely to mislead or deceive, in contravention of section 52 of the TPA; and
10.9. in connection with the supply or possible supply of goods or services, made a false or misleading representation with respect to the:
10.9.1. price of goods and/or services, in contravention of section 53(e) of the TPA; and
10.9.2. existence of a condition, right or remedy in contravention of section 53(g) of the TPA.
11. BAJV:
11.1. on or about 12 May 2010, represented to Stuart Moore and to Mr Moore's insurer, Cover More Insurance Services, that the Cost of Repair in respect of Damage to a vehicle rented by Mr Moore was $620.40 when, in fact, it was only $530.61;
11.2. on or about 29 and 30 April 2010, represented to Jason Tiew that the Cost of Repair in respect of Damage to a vehicle rented by Mr Tiew was $1583.85, when, in fact, it was only $1043.88;
11.3. in or about late January 2010, represented to Susan Cross that the Cost of Repair in respect of Damage to a vehicle rented by Ms Cross was $703.26, when, in fact, it was only $612.55;
11.4. on or about 28 May 2010, 8 December 2010, 20 December 2010 and 14 July 2011 represented to Marc Sward that the Cost of Repair in respect of damage to a vehicle said by BAJV to have been negligently caused by Mr Sward (who had been involved in an accident with a renter of the vehicle), that the Cost of Repair was $1716, when, in fact, it was only $1544.40;
11.5. on or about 2 June 2010, represented to Craig Martin that the Cost of Repair in respect of damage to a vehicle said by BAJV to have been negligently caused by Mr Martin (who had been previously involved in an accident with a renter of the vehicle), that the Cost of Repair was $911.93, when, in fact, it was only $812.93;
11.6. from the date on which Damage to a vehicle rented by Susan Cross was repaired in or about late January 2010 until 13 September 2010, BAJV represented to Ms Cross as a continuing representation by its silence, that it was not obliged to refund to her any part of the Damage Charge paid by her in respect of the Damage, when this was not the case;
11.7. on or about 26 March 2010, represented to Wilma Baird that the Cost of Repair in respect of Damage to a vehicle rented by Ms Baird was $511.50, when, in fact, it was only $460.35;
11.8. on or about 13 February 2012, represented to Peter Casson that the Cost of Repair in respect of Damage to a vehicle rented by Mr Casson was $2120.28, when, in fact, it was only $1544.40;
11.9. on or about 22 April 2010, represented to Thrifty in Hobart that the Cost of Repair in respect of damage to a vehicle said by BAJV to have been negligently caused by a vehicle rented by a Thrifty customer was $951.07, when, in fact, it was only $798.63;
11.10. in about August or September 2007, represented to Peter Smith that the Cost of Repair payable to FT Guy Bodyworks in respect of Damage to a vehicle rented by Mr Smith was $1,267.01, when, in fact, it was only $708.38;
11.11. in about August or September 2007, represented to Sharon Burne that the Cost of Repair payable to FT Guy Bodyworks in respect of damage to a vehicle said by BAJV to have been negligently caused by Ms Burne (who had been previously involved in an accident with a renter of the vehicle), was $575.39 when, in fact, it was only $486.46;
11.12. on about 10 November 2009, 26 November 2009, 4 December 2009 and in about March 2010, represented to Scott Targett that the Cost of Repair payable to FT Guy Bodyworks in respect of Damage to a vehicle rented by Mr Targett was $2000.52, when, in fact, it was only $1661.22;
11.13. on about 2 September 2010, 8 December 2010, 4 January 2011 and in about July 2011, represented to Lauren Smith that the Cost of Repair payable to FT Guy Bodyworks in respect of Damage to a vehicle rented by Ms Smith was $2463.22, when, in fact, it was only $784.32; and
11.14. on or about 30 December 2009, 8 January 2010, 3 August 2010 and in about December 2010, represented to Julie-Anne Vincent that the Cost of Repair payable to FT Guy Bodyworks in respect of damage to a vehicle said by BAJV to have been negligently caused by Ms Vincent (who had been previously involved in an accident with a renter of the vehicle), was $401.24 when, in fact, it was only $358.86;
and thereby, in trade or commerce:
11.15. engaged in conduct that was misleading or deceptive or likely to mislead or deceive, in contravention of section 52 of the TPA for conduct occurring prior to 1 January 2011 and section 18 of the ACL for conduct occurring after 1 January 2011; and
11.16. in connection with the supply or possible supply of goods or services, made a false or misleading representation with respect to the price of goods and/or services, in contravention of section 53(e) of the TPA for conduct occurring prior to 1 January 2011 and section 29(1)(i) of the ACL for conduct occurring after 1 January 2011.
12. BAJV:
12.1. on or about 9 January 2010, represented to Ms M that it had provided her with a refund which included an allowance in her favour of the full amount of the difference between the Damage Charge paid by Ms M and the Cost of Repair, when this was not the case and, in fact, BAJV should have paid a refund of at least a further $99.08 to Ms M;
12.2. on or about on or about 16 April 2010, represented to Denis Durham that it had provided him with a refund which included an allowance in his favour of the full amount of the difference between the Damage Charge paid by Mr Durham and the Cost of Repair, when this was not the case and, in fact, BAJV should have paid a refund of at least a further $396.39 to Mr Durham;
12.3. on or about 24 May 2010, represented to Harry Wood that it had provided him with a refund which included an amount in his favour of the full amount of the difference between the Damage Charge paid by Mr Wood and the Cost of Repair, when this was not the case and, in fact, BAJV should have paid a refund of at least a further $262.79 to Mr Wood; and
12.4. on or about 26 March 2010, represented to Wilma Baird that it had provided her with a refund which included an amount in her favour of the full amount of the difference between the Damage Charge paid by Ms Baird and the Cost of Repair, when this was not the case and, in fact, BAJV should have paid a refund of at least a further $102.30 to Ms Baird,
and thereby, in trade or commerce:
12.5. engaged in conduct that was misleading or deceptive or likely to mislead or deceive, in contravention of section 52 of the TPA; and
12.6. in connection with the supply or possible supply of goods or services, made a false or misleading representation with respect to the price of goods and/or services, in contravention of section 53(e) of the TPA.
13. From about December 2006 until February 2012, BAJV, by:
13.1. engaging in the conduct with respect to the Non-Refund Practice referred to in paragraph 1 above;
13.2. engaging in the conduct with respect to standard charges, minor damage and damage arising out of accidents with third parties referred to in paragraphs 2, 3 and 4 above; and
13.3. implementing the Two Invoice Practice referred to in paragraph 5 above,
being policies and/or practices:
13.4. that had the effect or likely effect of:
13.4.1. concealing from Rental Customers that the Damage Charge was more than the Cost of Repair;
13.4.2. increasing the amount of money collected by BAJV in respect of Damage;
13.4.3. increasing the amount of money retained by BAJV in respect of Damage;
13.4.4. enabling BAJV to retain money to which it was not entitled; and
13.4.5. the implementation of which constituted the use by BAJV of unfair tactics,
in circumstances where:
13.5. BAJV had substantial knowledge and experience in relation to assessing the seriousness of Damage, the repair process and the likely costs of repairing Damage;
13.6. Rental Customers did not, or alternatively could not be reasonably expected to have, any substantial knowledge or experience in respect of the costs of repairing vehicle damage or the likely cost of repairing the Damage;
13.7. the description of the Damage provided to Rental Customers in the tax invoices, Damage Letters and payment records issued by BAJV was expressed in terms of BAJV's own damage coding system and, accordingly:
13.7.1. was not readily understandable by Rental Customers;
13.7.2. did not readily allow Rental Customers to understand the precise nature or extent of the Damage; and
13.7.3. the circumstances identified in 13.6 above made it more difficult for the Rental Customer to assess the likely cost of repairing the Damage;
13.8. Rental Customers had no means of independently verifying the Cost of Repair;
13.9. it was one of BAJV's standard form contractual terms and conditions that, prior to renting the vehicle, the Rental Customer must have authorised BAJV to charge all monies payable to BAJV under the rental contract to the Rental Customer's credit card;
13.10. at about the time that BAJV prepared the tax invoice specifying the Damage Charge for each Rental Customer, it charged the Rental Customer's credit card and, accordingly, received payment from the Rental Customer, without the Rental Customer having to provide additional authority for the charge;
13.11. Rental Customers were often:
13.11.1. not present at the time of BAJV identifying the Damage and charging the Rental Customer's credit card in respect of the damage;
13.11.2. not aware of the Damage and/or the charge made to their credit card by BAJV until subsequently receiving the tax invoice and notification from BAJV that their credit card had been charged; and
13.12. the amount of the Damage Charge was also relevant to the amount of additional fees and charges paid to BAJV by the Rental Customer because the fees and charges, including an additional credit card fee were calculated by BAJV by reference to the Damage Charge,
BAJV engaged in conduct, in trade or commerce, in connection with the supply of goods and/or services to persons, that was, in all the circumstances, unconscionable, in contravention of section 51AB of the TPA and section 21 of the ACL.
14. From about December 2006 until February 2012, BAJV, by:
14.1. engaging in the conduct referred to in paragraphs 1 to 5 and 13;
14.2. engaging in the conduct referred to in paragraphs 6 and 7, in respect of the Renters listed in Annexure A;
14.3. engaging in the conduct referred to in paragraphs 10 to 12 in respect of each of:
14.3.1. Stuart Moore;
14.3.2. Justin Tiew;
14.3.3. Ms M;
14.3.4. Denis Durham;
14.3.5. Harry Wood;
14.3.6. Wilma Baird;
14.3.7. Susan Cross,
14.3.8. Peter Smith;
14.3.9. Scott Targett; and
14.3.10. Lauren Smith;
in the circumstances referred to in paragraphs 13.5 to 13.12, on each occasion, BAJV engaged in conduct, in trade or commerce, in connection with the supply of goods and/or services to persons, that was, in all the circumstances, unconscionable, in contravention of section 51AB of the TPA for conduct occurring prior to 1 January 2011 and section 21 of the ACL for conduct occurring after 1 January 2011.
15. Mr Ayers as the person:
15.1. with overall responsibility for the management of BAJV;
15.2. who controlled and directed all functions of the Tasmanian Europcar Business and was actively engaged in implementing and supervising all activities of the business,
aided, abetted, counselled or procured and was directly or indirectly knowingly concerned in, or party to, each of the contraventions referred to in paragraphs 1 to 14 above.
16. Ms Carr:
16.1. in her role as the person with responsibility for the administration of repair to damage incurred to BAJV's rental vehicles; and
16.2. by sending or authorising to be sent relevant correspondence to the Rental Customers was involved in or party to:
16.2.1. the contraventions of section 52 of the TPA and section 18 of the ACL referred to in paragraphs 1 to 5 above; and
16.2.2. the contraventions of section 52 of the TPA and section 18 of the ACL referred to in paragraphs 11.1, 11.2, 11.4, 11.5 and 11.6 and 12.2 and 12.3 above;
AND THE COURT ORDERS THAT:
Pecuniary penalties
BAJV
17. BAJV shall pay to the Commonwealth of Australia a total pecuniary penalty of $200,000 in respect of acts or omissions relating to:
17.1. BAJV's contraventions of sections 53(e), 53(g) and 51AB of the TPA, which occurred between 15 April 2010 and 31 December 2010; and
17.2. BAJV's contraventions of sections 21, 29(1)(i) and 29(1)(m) of the ACL, which occurred on or after 1 January 2011 until February 2012.
Mr Ayers
18. Mr Ayers shall pay to the Commonwealth of Australia a total pecuniary penalty of $40,000 in respect of acts or omissions relating to:
18.1. each of the contraventions of sections 53(e), 53(g) and 51AB of the TPA which he aided, abetted, counselled or procured, or was knowingly concerned in or a party to, which occurred between 15 April 2010 and 31 December 2010; and
18.2. each of the contraventions of sections 21, 29(1)(i) and 29(1)(l) of the ACL which he aided, abetted, counselled or procured, or was knowingly concerned in or party to, which occurred on or after 1 January 2011 until February 2012.
Other orders
19. BAJV and Mr Ayers shall pay to the ACCC, within 3 months of the making of this order by the Court, the costs of and incidental to these proceedings, as agreed or assessed.
20. Liberty to apply in relation to an appropriate publication order is reserved, in accordance with paragraph 49 of the accompanying reasons for judgment.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
tasmania DISTRICT REGISTRY | |
GENERAL DIVISION | TAD 64 of 2011 |
BETWEEN: | AUSTRALIAN COMPETITION AND CONSUMER COMMISSION Applicant
|
AND: | BAJV PTY LTD (ACN 094 966 953) First Respondent BRENDON AYERS Second Respondent TERESSA CARR Third Respondent
|
JUDGE: | MARSHALL J |
DATE: | 8 JUly 2013 |
PLACE: | melbourne |
REASONS FOR JUDGMENT
1 The main issue for determination in this proceeding is the appropriate penalty to be imposed on each of the first and second respondents for admitted contraventions of trade practices law dealing with consumer protection.
2 On 9 November 2011, the Australian Competition and Consumer Commission (“the ACCC”) commenced this proceeding in the Tasmania District Registry of the Court seeking relief in respect of conduct by the respondents which it alleged to be in breach of various provisions of the Trade Practices Act 1974 (Cth) (“the TPA”) and the Australian Consumer Law (“the ACL”) being Schedule 2 to the Competition and Consumer Act 2010 (Cth). The application was amended on 26 October 2012 to provide greater specificity in relation to the declaratory relief sought by the ACCC.
Admitted conduct
3 The conduct the subject of the application is admitted. The respondents concede that they contravened certain provisions of the TPA and of the ACL in their conduct of a Europcar franchise car rental business. The first respondent (“BAJV”) conducted the business. The second respondent, Mr Ayers, at all material times operated and controlled the business. He owned 50 per cent of the shares in BAJV until the termination of the franchise agreement with Europcar on 15 May 2013. Since that date, Mr Ayers and interests associated with him have owned 100 per cent of BAJV. The third respondent, Ms Carr, was at all material times the fleet controller of the business and reported directly to Mr Ayers.
4 The parties have filed a document entitled “Statement of Agreed Facts and Admissions” (“the Statement”). The document is dated 25 January 2013 and was admitted into evidence before the Court. It is annexed to these reasons for judgment and marked “Annexure A”. The contents of the Statement are accepted as agreed facts and form part of the findings of fact made by the Court in this proceeding. In addition, the parties called further evidence to assist the Court to determine appropriate remedial orders to be made as a consequence of the agreed contraventions. Only declaratory relief is sought against Ms Carr. That relief is not opposed.
5 The Statement outlines the conduct of BAJV and Mr Ayers which contravened the TPA and ACL. Shortly stated, the conduct of those respondents involved charging car rental customers for damage repairs at amounts which exceeded the actual cost of the repairs. The conduct included a failure to notify customers when a refund was due to them. This is described in the Statement as “non-refund conduct”. The Statement also refers to “standard charges”. This aspect of the agreed facts deals with BAJV’s policy to charge customers set amounts depending on the type of damage involved. The standard charge was almost always in excess of the likely cost of the repair, and, where that was so, BAJV nearly always failed to refund the difference between the cost of the repair and the actual charge levied on the customer’s credit card. A sub-set of this issue concerned minor damage to vehicles which BAJV usually arranged to be repaired onsite.
6 When hiring a rental vehicle, customers were obliged to complete a form which referred to a “Damage Liability Fee” (“DLF”). The fee was a set amount which would be levied against a customer’s credit card in the event that the vehicle was damaged. BAJV charged a customer involved in an accident the full DLF irrespective of the extent of damage or whether the rental customer was at fault. BAJV retained the DLF for up to seven years, in case a third party made a claim in respect of the accident. BAJV did not process any relevant refund in a timely manner.
7 BAJV also involved itself in what was termed the “two invoice practice” whereby BAJV received two invoices from a body repairer for work done on a damaged vehicle. The first would be used as the basis to charge a customer. The second, involving a lower figure, would reflect the actual charge sent to BAJV and paid by it. This reflected a discount of 10 per cent on labour charges and in some cases a discount on charges for parts levied by the repairer.
8 A fuller explanation of each of the above practices which together constitute the contravening conduct is set out in the Statement which is annexed to the reasons. The above discussion is intended to serve as a brief summary only.
The additional evidence
Ms Carr
9 Ms Carr swore an affidavit on which the ACCC relied in the proceeding. Counsel for BAJV and Mr Ayers cross-examined Ms Carr on that affidavit. Her affidavit is extremely detailed and covers many matters which are not in dispute and which are largely dealt with in the Statement. It is necessary therefore only to have regard to her evidence to the extent that aspects of it were addressed in final submissions.
10 BAJV and Mr Ayers sought to downplay the effect of the two invoice practice by contending that the repairer would be entitled to charge the retail price rather than the wholesale price for parts. However, the ACCC referred to evidence of Mr Ayers to the effect that BAJV was able to secure wholesale pricing for parts and that so much was unsurprising given the scale of BAJV’s operations. In his first affidavit, Mr Ayers referred to the difficulty in “securing parts directly”. However, Ms Carr gave evidence that BAJV played no role in obtaining parts at a wholesale price but that the body repairer concerned obtained the parts and invoiced BAJV. In any event, not a great deal turns on this evidence, as BAJV concedes that it was wrong not to pass on the savings to customers as a result of it obtaining a discount on parts.
11 The ACCC relied on Ms Carr’s evidence to show the extent of the practice adopted by BAJV in not refunding customers where the refund owed was less than about $400 and the customer had not requested a refund. Mr Ayers only admitted that he specifically gave Ms Carr instructions on one occasion not to process such a refund. In her affidavit, Ms Carr denied that that was so and said that she would often ask Mr Ayers whether she should process refunds of up to $500. She said, “I would follow his instructions in those circumstances, which were often not to process any refund”.
12 Under cross-examination, Ms Carr was firm in her denial that there was only one instance in which Mr Ayers told her not to process a refund. She gave evidence that:
There were several instances where I asked the same question [and] received the same answer from Mr Ayers and, after getting the same answer several times, that’s what I did with any similar scenarios...
That evidence is supported by a note on a Europcar Incidental Damage Report which says, “Refund if client calls”. Further, there is an entry on the BAJV computer system which states, “Please refund if client calls”. This evidence suggests that Mr Ayers’ involvement in the practice of failing to refund relatively small amounts to customers was more extensive than he is prepared to acknowledge.
Mr Ayers
13 Mr Ayers swore three affidavits in the proceeding and gave further oral evidence, largely to update the Court on his personal circumstances. Mr Ayers referred to a company known as “CLA Holdings” (“CLA”). It is the corporate entity which represents Europcar in Australia. BAJV was a joint venture between Mr Ayers, a company controlled by him and CLA. The former Chief Executive Officer of CLA, Mr Santiago, was until May 2013 a director of BAJV together with Mr Ayers. Mr Ayers is now the sole director of BAJV.
14 Mr Ayers gave evidence about the circumstances in which Europcar terminated BAJV’s franchise. In late March 2013, without warning to Mr Ayers, Europcar gave notice of its intention to terminate the franchise agreement on 15 May 2013. But for the termination of the franchise agreement, Mr Ayers had intended to operate the franchise business for another seven years in accordance with the terms of that agreement. The current position is that Mr Ayers solely controls BAJV. He is still an employee of BAJV but it is not engaged in any business. Transitional arrangements are in place for CLA to take over the BAJV fleet. Some ex BAJV staff are now employed by CLA. CLA has engaged Mr Ayers as a consultant for a two year period for $100,000 a year. As part of the consultancy arrangement, Mr Ayers has agreed not to compete with CLA in the rental car business for a period of five years.
15 The effect of the termination of the franchise agreement on Mr Ayers is that he has been required to exit the business which he built up over 17 years (first, under the name Advanced Car Rentals and then as a joint venture partner under the Europcar banner).
16 Counsel for BAJV and Mr Ayers made the following points about Mr Ayers’ evidence:
Mr Ayers accepts that it was a mistake and wrong to overcharge rental customers for repairs on damaged vehicles;
he accepts that such conduct was misleading and deceptive and in some cases unconscionable;
he has accepted responsibility for these mistakes and has paid dearly for them by losing the franchise;
his conduct was conscious but undertaken without an understanding of the implications or impropriety associated with it;
some of his conduct arose due to weaknesses in BAJV’s business systems, some of which were affected in turn by practices and procedures imposed by CLA.
17 Mr Ayers has only basic understanding of proper business management practices. Prior to this proceeding, he had little knowledge of consumer law. He has not received any training or guidance regarding the application of such law to the rental car industry.
18 Counsel for the ACCC contended that Mr Ayers’ explanations for some aspects of his misconduct should not be accepted. Counsel submitted that Mr Ayers in attempting to provide such explanations was “vacillating and unsatisfactory”.
19 In response, counsel for BAJV and Mr Ayers observed that Mr Ayers admitted making mistakes but did not consider that his conduct involved conscious wrongdoing. Counsel submitted that Mr Ayers gave plausible and genuine explanations as to why he failed to appreciate the gravity of his conduct at the relevant time. Counsel also referred to Mr Ayers’ cooperation with the ACCC before the commencement of this proceeding and in assisting to finalise the Statement.
20 The business practices which constitute the contravening conduct were misleading and deceptive. They were also unconscionable in several respects but did not involve fraudulent conduct. Much of the attack on Mr Ayers credit tended to suggest that his conduct bordered on the fraudulent. I do not accept that characterisation. Mr Ayers is a relatively unsophisticated businessman who had little understanding of his obligations under consumer law. Notwithstanding that his credit was challenged under cross-examination, Mr Ayers was willing to admit that some aspects of his evidence were erroneous. However, his behaviour unfairly disadvantaged BAJV’s customers when it should have been apparent to Mr Ayers that such disadvantage was a logical consequence of his business practices. It is unsatisfactory to blame the conduct on inadequacies in BAJV’s business systems or practices inherent in Europcar franchises.
Mr MacFie
21 Mr MacFie is an investigator employed by ACCC in its Hobart office. He has had the carriage of ACCC’s investigation which led to the current proceeding. He affirmed an affidavit which referred to the nature and extent of the investigation. The affidavit was prepared before the respondents made their concessions as to liability. Under cross-examination, he admitted that BAJV’s then lawyers invited the ACCC to discuss BAJV’s potential liability under consumer law but that BAJV heard nothing in response until some months later when the application in the proceeding was served on the respondents. No explanation was given for ACCC’s lack of response to the invitation from BAJV’s lawyers to have discussions.
appropriate penalties
22 Although the conduct of BAJV and Mr Ayers which was the subject of the ACCC’s investigation commenced in 2006, the conduct which the Court can consider for the purposes of assessing penalty is that which occurred from 15 April 2010 to the commencement of the proceeding in November 2011. Penalties may be imposed under s 76E(1) of the TPA and s 224(1) of the ACL. The period covered by the TPA is 15 April 2010 to 31 December 2010. The ACL applied to the conduct from 1 January 2011.
23 The relevant principles guiding the Court’s assessment of monetary penalties are not in dispute. They were most recently authoritatively stated in Singtel Optus Pty Ltd v ACCC (2012) 287 ALR 249 at [36]-[37]. The relevant factors are:
the nature and extent of the act or omission and of any loss or damage thereby suffered;
the circumstances in which the contraventions took place;
whether the person has been previously found by the Court to have been engaged in similar conduct;
the size and financial position of the contravener;
the deliberateness of the contravention and the period over which it extended;
whether the contravention arose out of the conduct of senior management or at a lower level;
whether the contravener has a corporate culture conducive to compliance with trade practices law as evidenced by educational programs and disciplinary or other corrective measures in response to an acknowledged contravention;
whether the contravener has shown a disposition to cooperate with the ACCC in relation to the contravention;
whether the contravener has engaged in similar conduct in the past;
whether the contravening conduct was systematic, deliberate or covert.
24 The principles of general and specific deterrence must be considered. As a final check in process, the Court will ensure that the overall penalty is appropriate and that the total penalty imposed for several contraventions does not exceed what is proper taking into account all the contravening conduct.
25 The maximum penalty available for contravening conduct of the type under consideration is $1.1 million for a corporation and $220,000 for an individual. For reasons which will be later explained, the Court considers that the relevant conduct involves two courses of conduct such that the available maximum penalties are double those set out above. Although all relevant factors must be considered, it is first necessary to give careful attention to the maximum penalties available. They indicate what is open to the Court to address the worst possible scenario.
The nature and extent of the contraventions and ensuing loss and damage
26 The contravening conduct arose from two courses of conduct: the non-refund conduct referred to at [5] above and the two invoice practice referred to at [7] above. Accordingly, there are two separate courses of conduct which gave rise to two separate contraventions. As indicated above, this results in maximum available penalties of $2.2 million for BAJV and $440,000 for Mr Ayers.
27 Counsel for ACCC submitted that there were five courses of contravening conduct. The first was the two invoice practice. The second was described as the standard charges conduct. The third and fourth both concern non-refund conduct. The fifth concerned representations on the BAJV website which dealt with matters the subject of the other alleged courses of conduct.
28 As counsel for the ACCC conceded, ultimately, it is of no great significance whether the Court considers there are two or five courses of conduct when one has regard to the totality principle. However, it seems tolerably clear that apart from the two invoice practice, the other courses of conduct alleged by ACCC all involve some aspect of BAJV’s non-refund conduct.
29 Although the admitted contravening conduct spans from December 2006 to February 2012, the vast bulk of it occurred between 21 December 2006 and 14 May 2010. As discussed at [22], it is only conduct from 15 April 2010 that can be taken into account in assessing penalty; see ACCC v EDirect Pty Ltd (in liq) (2012) 206 FCR 160 at [74] per Reeves J. In the period June 2010 to December 2011, BAJV took steps ensure that the conduct which gave rise to the contraventions ceased and established systems to prevent further transgressions.
30 The ensuing loss and damage to customers must be assessed by reference to the period from 15 April 2010. Although the evidence in the proceeding reveals that only 13 renters were misled or deceived from 15 April 2010, it is likely that the effect of the contravening conduct was more widespread. However, some caution is required in assessing the extent of the reach of the conduct in the absence of any guide as to the likely number of persons affected. It is sufficient to say that whilst the relevant period of the offending conduct was brief, its effect would not have been insignificant.
The circumstances in which the contravening conduct occurred
31 Counsel for BAJV submits that there is no evidence of pre-planning or calculated behaviour. Whilst that may be so, a substantial portion of the conduct was conceded to involve unconscionability. While some of the conduct may have been facilitated by inadequate business systems, it must be borne in mind that it also resulted from conduct by Mr Ayers designed to increase the profitability of BAJV at the expense of customers who were unlikely to be aware that they were being overcharged.
Whether the person has been previously found by the Court to have engaged in any similar conduct
32 There is no allegation that either BAJV or Mr Ayers has previously been found by the Court to have engaged in any similar conduct. An appropriate allowance should be made in each case.
The size of the contraveners
33 The financial position of BAJV and Mr Ayers is set out at [14] to [18] of the Statement. Subsequently, BAJV’s financial position has been adversely affected by its loss of the Europcar franchise in Tasmania. Mr Ayers’ financial position has also been adversely affected by that loss. The estimated profit before tax for BAJV of $40,000 in the recently completed financial year will doubtless have to be adjusted downwards. It is sufficient to say that BAJV is not a large profitable company but is more in the nature of a corporate entity for a small to medium family business. Although Mr Ayers is in a relatively secure financial position and is currently engaged on a consultancy for $100,000 per year, he is by no means a wealthy man.
The deliberateness of the contraventions and the period over which they extended
34 These factors have been addressed in the context of discussing the nature and extent of the contraventions and the circumstances in which they occurred.
Whether the contraventions arose out of the conduct of senior management
35 This is a relatively rare case in which the contraventions did arise out of the conduct of senior management but nonetheless this factor does not loom large in the assessment of an appropriate penalty. That is because BAJV is a relatively small and unsophisticated company. Mr Ayers’ position should not be equated with senior management in a well resourced, sophisticated corporation.
Whether the contravener has a corporate culture conducive to compliance with trade practices law
36 Apart from contravening conduct in July 2011 arising from an admitted oversight, BAJV took steps to ensure future compliance with trade practices law. It appointed a customer service officer, updated the terms and conditions of the standard rental agreement to ensure greater disclosure and conducted an annual review of all third party claims.
Cooperation with the ACCC
37 BAJV and Mr Ayers cooperated with the ACCC in the preparation of the Statement. They were also prepared to engage in discussions with the ACCC concerning the contraventions prior to the issue of the proceeding. A letter, dated 28 February 2011, from the then lawyers for BAJV and Mr Ayers inviting discussions was met with silence. The next contact the ACCC had with BAJV and Mr Ayers was to serve this proceeding on the respondents many months later. It is not in dispute that BAJV also implemented changes in its business practices to avoid repetition of the contravening conduct prior to the Statement being agreed. The admissions contained in the Statement have also obviated a lengthy trial on liability. BAJV and Mr Ayers deserve credit for their cooperation with the ACCC.
Whether the contravener has engaged in similar conduct in the past
38 Caution must be exercised in dealing with this criterion, as the conduct which may be taken into account for the purposes of assessing penalty is limited to that occurring after 15 April 2010. It is sufficient to say for current purposes that the Court is aware of admitted contraventions going back to 2006 but it would be erroneous to take them into account in assessing penalty. They have not been the subject of any prior finding by this Court.
Deliberateness of the contravening conduct
39 The vast bulk of the contravening conduct was deliberate rather than inadvertent. Some of it may have flowed from poor management systems but nevertheless most of it concerned deliberate conduct which involved BAJV taking advantage of its customers.
Deterrence
40 In assessing an appropriate penalty, the Court must set a sum which takes into account specific and general deterrence. The penalty must be sufficiently high to deter repetition of the conduct by the contraveners and serve as a warning to others who may be tempted to engage in such conduct. It must be sufficiently high so that it is not considered as merely the price of doing business.
Conclusion on the quantum of penalties
41 The assessment of the appropriate penalties on BAJV and Mr Ayers is a difficult task. The admitted conduct involves misleading and deceptive as well as unconscionable conduct. Unconscionable conduct is particularly serious. On the other hand, the period to which the Court is entitled to have regard in assessing penalty is a relatively short one. The Court is also not dealing with a large sophisticated corporation but a relatively unsophisticated small to medium-sized family business. Doing the best it can in the circumstances, the Court considers that the contravening conduct should attract what might be described as a “mid- range” penalty but leaning towards the lower end of the so-called mid range. It is significant that BAJV and Mr Ayers cooperated with the ACCC and took steps to ensure that the offending conduct would not be repeated. The Court considers that the ACCC should have taken a more proactive role in responding to the respondents’ then lawyers’ invitation to meet for discussions before instituting this proceeding.
42 Applying the instinctive synthesis involved in the totality principle, whilst acknowledging the inexactness inherent in this process, the Court considers that the appropriate penalty should be as follows:
$200,000 for BAJV; and
$40,000 for Mr Ayers.
ancillary orders
Declarations
43 The ACCC has submitted a proposed order which includes declarations binding each respondent. There is no opposition to the making of these declarations. It is appropriate to make them to record the Court’s disapproval of the conduct which has been admitted.
Injunctions
44 The ACCC seeks that the Court make injunctions to restrain further conduct of the type which constituted the contravening conduct in this proceeding. Such restraining injunctions are sought for a five year period. As discussed at [14] above, Mr Ayers and BAJV will not, in any event, be involved in the car rental industry for a period of five years, as a result of his consultancy agreement with CLA. In these circumstances, little purpose is served in making the proposed injunctions.
Internal audit and customer notification
45 The ACCC seeks an order that BAJV complete a review of all of its customer files from April 2010 to ensure that customers have been paid refunds to which they are entitled.
46 In response, BAJV offers an undertaking to pay renters listed in Schedule 1 to the Statement amounts of refund to which they are entitled. Those renters are 46 in number but the undertaking covers the period pre-15 April 2010 which could not be the subject of any order made in this proceeding. However, BAJV seeks to be released from that undertaking if the Court makes the internal audit and customer notification order.
47 It is unlikely, given the steps put in place by BAJV to remedy the contravening conduct, that there would be many examples of contravening conduct from mid-2010 to November 2011. It is preferable, in the interests of ensuring that refunds are made to the 46 people known to have been overcharged, that the undertaking of BAJV be accepted and that the internal audit and customer notification orders proposed by the ACCC not be made.
Publication orders
48 The ACCC seeks that BAJV publish an advertisement in the Saturday edition of the Australian and the three daily Tasmanian newspapers. The proposed advertisement contains the Europcar logo. BAJV has no entitlement to use that logo. It is no longer the Tasmanian franchisee for Europcar.
49 For current purposes, no publication order is included in the orders made today. The parties must, within 21 days, submit to the Court a proposed revised advertisement which is consistent with these reasons. The advertisement which the Court will order will not contain any logo at the top of the page. It will also not refer to any orders as to redress, but should acknowledge the undertaking offered by BAJV as to payments owed to renters referred to in the Statement. In the absence of agreement, the issue can be resolved on the papers.
costs
50 BAJV and Mr Ayers propose that costs should be limited to a figure in the range of $25,000 to $50,000, having regard to their offer to meet with the ACCC to attempt to resolve their dispute before the commencement of this action. However, I see no reason why costs should not follow the event, given that the ACCC’s reluctance to negotiate has already been taken into account in the assessment of penalties.
I certify that the preceding fifty (50) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Marshall. |
Associate:
ANNEXURE “a”
statement of Agreed facts And Admissions
Part 1 Introduction
1. This Statement of Agreed Facts and Admissions (Statement) is made jointly by the Applicant (ACCC) and each of the Respondents for the purposes of section 191 of the Evidence Act 1995 (Cth).
2. This Statement deals with conduct that is agreed to have taken place from about December 2006 to February 2012 (the relevant period) in relation to charges for repair of damage to rental vehicles hired from BAJV Pty Ltd (BAJV) trading as Europcar, in Tasmania.
3. The facts agreed to, and the admissions made herein, are agreed to for the purpose of these proceedings only and do not constitute any admission outside the context of these proceedings.
4. The ACCC and each of the Respondents have reached agreement as to the relevant facts regarding the conduct which gives rise to the contraventions. These facts are set out below.
PArt 2 the parties
The Applicant - ACCC
5. The ACCC is, and was at all material times, a body corporate duly established under section 6A of the Competition and Consumer Act 2010 (Cth) (CCA)1, and is able to sue in its corporate name.
The First Respondent - BAJV Pty Ltd
6. BAJV Pty Ltd (BAJV) is a company that is and was at all material times:
a) duly incorporated under the Corporations Act 2001 (Cth) and able to be sued in its corporate name; and
b) a corporation within the meaning of section 4 of the TPA and section 4 of the CCA.
7. BAJV is a joint venture company between Brendon Ayers (and his company ACR (Aus) Pty Ltd (ACR)) (50%) and CLA Holdings Pty Ltd (50%).
8. Since at least 2000, BAJV has operated a franchised business in Tasmania trading as Europcar (Tasmanian Europcar Business), pursuant to a franchise agreement between Delta Car Rentals Australia Pty Ltd and BAJV (Franchise Agreement).
9. In the course of operating the Tasmanian Europcar Business BAJV offers, and has at all material times offered, vehicle rental services to consumers.
10. In the course of operating the Tasmanian Europcar Business, BAJV has complied with its obligations under the Franchise Agreement in relation to the website located at URL www.europcar.com.au (Europcar Website), including by advertising the Europcar Website in its promotional material.
11. Accordingly, BAJV has at all material times, for the purposes of its business, adopted the content of the Europcar Website.
The Second Respondent - Brendon Ayers
12. Brendon Ayers (Mr Ayers) is and was at all material times:
12.1. a director and managing director of BAJV;
12.2. the person with overall responsibility for the management of BAJV;
12.3. the person who controlled and directed all functions of the Tasmanian Europcar Business and was actively engaged in implementing and supervising all activities of the business;
12.4. the person who was responsible for the implementation and supervision of the practices and conduct described at paragraphs 19 to 85 below; and
12.5. the sole shareholder and director of ACR.
The Third Respondent - Teressa Carr
13.1. is and was at all material times an employee of BAJV;
13.2. from December 2006 until December 2011, held the position of Fleet Controller with responsibility, among other things, for administering the repair of rental vehicles.
Financial position of the First and Second Respondents
BAJV
14. For the 2008 to 2012 financial years, BAJV's total revenue was, and for the 2013 financial year BAJV's revenue is expected to be, as follows:
2007/08 | 2008/09 | 2009/10 | 2010/11 | 2011/12 | 2012/13 est | |
BAJV Pty Ltd | ||||||
Average Daily Earn | $59.90 | $55.21 | $56.73 | $56.55 | $52.90 | $50.00 |
Rental Days | 177702 | 197101 | 197078 | 175996 | 160859 | 160000 |
Gross Revenue | $13,214,048.00 | $13,825,186.00 | $15,039,237.00 | $13,098,031.00 | $11,198,435.00 | $11,000,000.00 |
Profit before Tax | $1,239,038.00 | $1,226,369.00 | $893,537.00 | $44,358.00 | $249,624.00 | $ - |
Dividend's paid | $700,000.00 | $700,000.00 | $700,000.00 | $300,000.00 | $40,000.00 | $40,000.00 |
franked | franked | franked | unfranked | unfranked | unfranked |
15. As at 30 June 2011, the value of BAJV's assets was $8,094,515 and its liabilities totalled $6,851,468. The net value of its assets was $1,243,047.
Mr Ayers
16. For the 2008 to 2012 financial years, Mr Ayers received income from BAJV which was, and for the 2013 financial year is expected to be, as follows:
Brendon Ayers | 2007/08 | 2008/09 | 2009/10 | 2010/11 | 2011/12 | 2012/13 est |
Management Fee from BAJV P/L | $90,000.00 | $90,000.00 | $95,000.00 | $95,000.00 | $95,000.00 | $95,000.00 |
Dividend | $175,000.00 | $175,000.00 | $175,000.00 | $75,000.00 | $10,000.00 | |
Gross Taxable Income/Loss including salary | $281,925.00 | $1,918.00 | $92,954.00 | $128,336.00 | $60,000.00 |
17. For the 2009 to 2012 financial years, ACR, of which Mr Ayers is the sole shareholder, received dividends from BAJV which was, and for the 2013 financial year is expected to be, as follows:
ACR (AUS) P/L | 2007/08 | 2008/09 | 2009/10 | 2010/11 | 2011/12 | 2012/13 est |
Profit/Loss |
| -$6,704.00 | $32,682.00 | $48,915.00 | -$3,550 | loss |
Dividend | $175,000.00 | $175,000.00 | $175,000.00 | $75,000.00 | $10,000.00 | |
Taxable Income |
| Nil | Nil | Nil | Nil | Nil |
18. As at 29 May 2012, the value of Mr Ayers' assets was:
PROPERTY | Est Value | Asset | Liability | |||||||||||
19 Luck Crt* | St Helens | Vacant Land | $180,000.00 | $90,000.00 | ||||||||||
Rathmolyn West* | Breadalbane | Farm | $700,000.00 | $350,000.00 | $209,112.47 | Island State Farm Loan 51429837 B & L Ayers | ||||||||
Rathmolyn West* | Breadalbane | House | $900,000.00 | $450,000.00 | $232,283.45 | Island State Home Loan 60090121 B & L Ayers | ||||||||
246 St Helens Point Rd* | St Helens | Holiday Shack | $300,000.00 | $150,000.00 | ||||||||||
SHARES | ||||||||||||||
Origin Energy | 808 | $12.95 | $10,463.60 | |||||||||||
Boral | 961 | $3.51 | $3,373.11 | |||||||||||
James Hardie | 426 | $7.45 | $3,173.70 | |||||||||||
ANZ | 1472 | $20.63 | $30,367.36 | |||||||||||
Mystate | 387 | $3.20 | $1,238.40 | |||||||||||
ACR (Aus) Pty Ltd ^ | $197,091.68 | |||||||||||||
BAJV Shares (refer BAJV) ^ | $311,777.75 | |||||||||||||
INVESTMENTS | ||||||||||||||
IOOF | S100015678 | $22,000.00 | ||||||||||||
OTHER ASSETS | ||||||||||||||
Island State Chq Account | 51426602 | $57.84 | ||||||||||||
Interest in Sole Trader t/as Advance Car Rentals | $538,422.12 | |||||||||||||
Sub Total | $2,157,965.56 | $441,395.92 | ||||||||||||
OTHER NON-BUSINESS ASSETS | ||||||||||||||
Savage Boat | $20,000.00 | |||||||||||||
Sub Total | $20,000.00 | |||||||||||||
Total | $2,177,965.56 | $441,395.92 | $1,736,569.64 | |||||||||||
Notes: * relates to joint assets held by both Brendon and Lisa Ayers ^ includes net asset valuation of BAJV at 30 June 2012 and is subject to the impact of ACCC fine | ||||||||||||||
Part 3 the conduct
19. During the relevant period, BAJV levied charges on customers for loss, and accident damage to vehicles rented by customers, which resulted in a number of those customers being charged by BAJV for repairing damage to rental vehicles where those charges exceeded the Cost of Repair.2 This occurred as a result of the practices and conduct described in paragraphs 31 to 85 below.
20. The Europcar Website has from at least about 2006 included a written statement under the heading 'Frequently Asked Questions' to the following effect:
20.1. in the event of damage to the vehicle a 'Damage Liability Fee' would be charged; and
20.2. if the loss or damage is ultimately less than the Damage Liability Fee then part of the Damage Liability Fee will be refunded.
21. During the relevant period BAJV entered into a separate written contract with each of the people listed in column 2 of Schedule 1 (the Renters) for the rental of a vehicle in Tasmania.
22. Each of the contracts included terms to the following effect:
22.1. the Renter must return the rented vehicle in the same condition that it was in when rented;
22.2. the Renter is liable to, and must pay, BAJV for the costs, losses and liabilities detailed in the Rental Agreement (for example, those listed in Clause 8.1 of the Rental Agreement effective April 2008).
22.3. the Renter must pay to BAJV the 'Damage Liability Fee' listed in column 5 of Schedule 1 if there is damage to the rented vehicle;
22.4. the Renter authorised BAJV to charge all moneys payable under the rental contract to that person's credit card; and
22.5. if the Renter believed there was an error or that the amount charged was unreasonable, they must initiate the dispute resolution procedure set out in the Rental Agreement (for example, the procedure listed in Clause 16 of the Rental Agreement effective April 2008).
22A. Throughout the relevant period, the Rental Agreement contained provisions pursuant to which rental customers were liable for losses and charges in addition to the Cost of Repair, comprising the cost of towing, recovering and storing the rental vehicle, for all damage to the property of the Renter or the property of any person caused by the Renter or arising from the Renter's use of the vehicle, appraisal or assessment fees, reasonable administrative fees and legal costs of recovery and losses associated with downtime.
23. Each of the Renters returned the rented vehicle listed in column 4 of Schedule 1 to BAJV on or about the date listed in column 6 of Schedule 1, with accident damage.
24. BAJV provided each of the Renters with a payment record headed 'Tax Invoice' and also in many (but not all cases) a Damage Letter3, which also bore the heading 'Tax Invoice', on or about the date listed in column 7 of Schedule 1 which contained an amount for the Damage Charge.4
25. Each of the Damage Letters referred to in paragraph 24 above was generated automatically by BAJV in a form pre-set by Europcar’s Cars+ software when a BAJV employee selected “Yes” to the question “Do you want to print a Damage Letter”. The Damage Letter included (among other statements and entries) the following:
25.1. “this invoice is to inform you of the damage caused to Europcar’s vehicle during your recent rental and also the charges that you have incurred for this damage”;
25.2. “you are liable for the cost of any damage that occurs whilst you are renting a vehicle”;
25.3. “a description of the new damage noticed on return of your vehicle can be found in the right hand column of this letter along with an itemised breakdown of the repair cost”;
25.4. “this tax invoice is a receipt and can be forwarded to your travel insurance company if required”; and
25.5. in the right hand column, the heading “Damage Charges”, followed by an item “Estimated Damage Cost”, an item “Total Damages Charges” (which for each of the Renters is the amount listed in column 8 of Schedule 1, a statement that “If damage costs are greater than the DLF, only DLF will apply” and an item for Fees and Charges5 payable.
25A. Each of the payment records referred to in paragraph 24 above was set out in the same form as an opening rental agreement, with three columns to a page but varied from the opening rental agreement by including the following:
25A.1. in the right hand side column, an entry headed "New Vehicle Damage" which lists accident damage to the vehicle
25A.2. in the centre column, a list of fees and charges including a "Damage Liability Fee” and one or more of a "Premium Location Surcharge" and "Admin Fee".
26. At or about the time that BAJV prepared the payment record and the Damage Letter and provided them to each Renter, it charged the credit card of the Renter and accordingly received payment from the Renter of an amount that included the Damage Charge relating to that Renter together with the applicable Fees and Charges and a fee for credit card use.
27. For each of the Renters, the Cost of Repair was the amount in column 9 of Schedule 1.
28. For each of the Renters, the Cost of Repair was less than the Damage Charge.
Non-Refund Conduct
29. In the course of managing the repair of rental vehicles during the relevant period, BAJV, by Mr Ayers and Ms Carr, engaged in the following conduct:
29.1. where a rental customer paid a Damage Charge to BAJV and the Cost of Repair was less than the Damage Charge paid, BAJV would often not contact the rental customer to notify that person of that lower Cost of Repair;
29.2. BAJV would often not notify the rental customer, without first receiving an enquiry from the customer, that a refund was due; and
29.3. BAJV would often not process a refund to the rental customer without first receiving an enquiry from the customer about whether any refund was payable to them
(the Non-Refund Conduct).
30. As part of the Non-Refund Conduct, BAJV engaged in the conduct set out in paragraphs 31 to 40 below.
31.1. maintained a set of standard charges for items or types of damage, developed and updated by Mr Ayers (Standard Charges); and
31.2. directed its employees to apply the Standard Charges when charging rental customers for accident damage of that kind.
32. The Standard Charge for each item or type of accident damage nearly always exceeded the likely Cost of Repair for that item or accident damage of that kind.
33. In the event that the Cost of Repair was less than the Damage Charge, BAJV nearly always failed to refund the difference between the Cost of Repair and that Damage Charge.
34. The conduct referred to in paragraphs 29 to 33 was capable of leading BAJV's rental customers into thinking that the Standard Charge was the Cost of Repair and that, accordingly no refund was owed to them, when this was not always the case.
Minor Damage
35. When a rental vehicle was returned to BAJV by a rental customer with Minor Damage6:
35.1. BAJV would charge the rental customer a Damage Charge by reference to the Cost of Repair, including by reference to the Standard Charges referred to in paragraph 31 above;
35.2. where the Minor Damage consisted of dents and scrapes, BAJV would not always have every instance of Minor Damage repaired alone;
35.3. instead sometimes repairs would be carried out after the vehicle had incurred several incidences of Minor Damage and BAJV would then have multiple repairs conducted at one time for a lower Cost of Repair than the total of the Damage Charges charged to the rental customers for those several incidences of Minor Damage;
35.4. in many of the cases referred to paragraph 35.3, the Cost of Repair for each of the incidences would also be less than the Damage Charges charged to the rental customers for those several incidences of Minor Damage;
35.5. when the Cost of Repair in respect of each incident of Minor Damage was less than the Damage Charge charged to the rental customer, BAJV failed to refund the difference between the Cost of Repair and that Damage Charge.
36. The conduct referred to in paragraph 35 was capable of leading BAJV's rental customers into thinking that the amount charged for the Minor Damage was the Cost of Repair and that, accordingly, no refund was owed to them, when this was not always the case.
Damage arising out of accidents with third parties
37. Where a rental customer returned a rental vehicle which had been involved in an accident with a third party:
37.1. BAJV charged that rental customer the full Damage Liability Fee, irrespective of:
37.1.1. the nature and extent of the accident damage and the cost or estimated cost to repair it;
37.1.2. whether or not the rental customer was at fault in the accident;
37.1.3. the extent of the damage to the third party's property.
37.2. BAJV retained the sum charged:
37.2.1. irrespective of the Cost of Repair;
37.2.2. even where the third party was at fault, if the third party had not confirmed that it made no claim against BAJV.
37.3. It had a general policy that such funds be retained for 7 years, in cases where BAJV considered that there was a possibility of a claim being made by a third party which had not crystallised at that stage.
37.4. However, BAJV's system for recording and reviewing damage and repair files was inadequate in that it did not ensure that in every case where:
37.4.1. a third party claim was resolved for a sum (after deducting the Cost of Repair to the rental vehicle) that was less than the Damage Liability Fee; and
37.4.2. BAJV otherwise received other confirmation that any claim by the third party would not be made or (after deducting the Cost of Repair to the rental customer’s vehicle) would be less than the full Damage Liability Fee,
BAJV would process a refund to the rental customer in a timely manner.
38. The conduct referred to in paragraph 37 above was capable of leading BAJV's rental customers into thinking that BAJV had an effective system in place for processing a refund that was due to be made to a rental customer, when this was not the case.
The Two Invoice Practice
39. During the relevant period, BAJV had the following practice in relation to the repair of certain rental vehicles that were for repair by an off-site repairer:
39.1. where the repair was undertaken by Booths Bodyworks (Booths), FT Guy Bodyworks (FT Guy) or Cramps Bros Bodyworks (Cramps Bros) BAJV received from the repairer a quote for the repair of the accident damage;
39.2. BAJV used the quote for the purpose of calculating the Damage Charge;
39.3. if the repairer was Booths, then after the repair was undertaken by Booths, Booths issued two invoices for the work; one invoice at the quoted price which did not provide for any discount for labour and which included any parts listed at a retail price (Higher Invoice) and one at the quoted price less a 10% discount on labour, and excluding any amount for parts, and with other adjustments to the quoted price variations, including any reductions in labour charges, reductions in other charges, and reductions relating to parts that were not required (Lower Invoice);
39.4. if the repairer was FT Guy or Cramps Bros, then after the repair was undertaken by that repairer, the repairer issued a three page invoice. Page 2 would show the original quoted price with parts at the parts supplier's listed price plus an additional margin (Higher Invoice), and Pages 1 and 3 showing the amount payable by BAJV, excluding any amount for parts and with any other adjustments to the quoted price including any reductions in labour charges, reductions in other charges, and reductions relating to parts that were not required (Lower Invoice);
39.5. where the repair involved the replacement of parts, the repairer arranged for the relevant parts supplier to send an invoice for the parts directly to BAJV with the parts invoiced at a discount from the price used by the repairer in its quote and in the Higher Invoice;
39.6. the Lower Invoice was the invoice paid by BAJV; and
39.7. BAJV used the Higher Invoice in support of representations to its rental customer, or a third party from whom BAJV was claiming payment in respect of the accident damage, that the Cost of Repair was the amount specified in the Higher Invoice;.
39.8. Booths initiated the issuing of the Higher Invoice and the Lower Invoice in respect of their invoices, but Ayers was the person responsible for directing and overseeing the implementation at BAJV of the practices described above (the Two Invoice Practice).
40. The Two Invoice Practice was capable of leading BAJV's rental customers into thinking, in circumstances where this practice was applied, that BAJV was entitled to payment of the amount in the Higher Invoice as its Cost of Repair instead of the amount in the Lower Invoice, when this was not the case.
Conduct in relation to Mr Marc Sward
41. On or about 3 May 2010, Renter Peter Casson entered into a rental contract with BAJV for the rental of a Nissan Tiida (registration B82BN) from BAJV.
42. On 3 May 2010, the rented Nissan Tiida was involved in an accident with a vehicle driven by Marc Sward.
43. On or about 17 May 2010, BAJV engaged in the Two Invoice Practice, obtaining a Higher Invoice in the amount of $1716 and a Lower Invoice in the amount of $1544.40, both with the same invoice number. BAJV paid the sum of $1,544.40 (authorised by Teressa Carr) and BAJV claimed $1716 from Mr Sward as referred to in paragraph 46 below.
44. On about 28 May 2010 BAJV sent a letter (prepared by Teressa Carr) to Mr Sward asserting that he had negligently caused accident damage to the rented Nissan Tiida and demanded payment from him of $1716 for the repair of the vehicle and $404.28 for loss of hire expenses.
45. On 26 October 2010 the ACCC raised with each of Ms Carr and Mr Ayers of BAJV an allegation that BAJV had demanded payment from Mr Sward of a repair cost of $1716 when BAJV had only incurred a repair cost of $1544.40, and each witness was shown a letter from BAJV to Mr Sward dated 28 May 2010, and a Booths Bodyworks invoice dated 17 May 2010 for $1544.40.
46. On 8 December 2010 and again on 20 December 2010 Ms Carr, for and on behalf of BAJV, sent a letter to Mr Sward seeking payment of $2120.28 (which is $1716 + $404.28) in respect of rectification of damage to the vehicle.
47. On 8 July 2011 BAJV filed proceeding no. M2011/3926 in the Magistrates Court of Tasmania against Mr Sward seeking payment of $2120.28 as being the damage rectification costs, and the contact person listed on the Claim was Ms Carr.
48. On 14 July 2011 BAJV effected service of the Magistrates Court Claim on Mr Sward by registered post.
49. On or about 30 September 2011 BAJV applied for and obtained default judgment in proceeding no. M2011/3926 against Mr Sward for $2120.28, and the contact details given were for Ms Carr.
50. On 13 February 2012 BAJV sent a letter to Mr Casson providing him with a partial refund of the $4997.01 charged to him in May 2010, in the amount of $2373.73, enclosing a copy of the Magistrates Court default judgment, and stating in the letter that a further refund will be processed once the third party has paid the outstanding costs in the default judgment.
Additional Magistrates Court proceedings
Peter Smith
51. On or about 30 June 2007, rental customer Peter Smith entered into a rental contract with BAJV for the rental of a Nissan Tiida (registration FN0258) from BAJV.
52. Later on 30 June 2007, the rented Nissan Tiida was involved in an accident.
53. On or about 23 July 2007, BAJV engaged in the Two Invoice Practice, obtaining an invoice from FT Guy Bodyworks which included a Higher Invoice of $1,267.01 and a Lower Invoice of $708.38. BAJV claimed $1267.01 from Mr Smith as referred to in paragraph 54 below.
54. On 29 August 2007, BAJV filed proceeding no. L40568/07 in the Magistrates Court of Tasmania (the Second Magistrates Court Proceeding) against Mr Smith seeking payment of $1,628.15 in respect of the costs of damages incurred to the vehicle, (which included as a particular of the claim is $1267.01 in repair costs, $352.66 in demurrage and $7.83 in interest). The contact person for BAJV listed on the Second Magistrates Court Proceeding was Ms Carr.
55. It was BAJV's usual practice to arrange for service of Magistrates Court claims, and, in accordance with that practice, Ms Carr arranged service on Mr Smith.
Sharon Burne
56. In early 2007, rental customer Clifford Alan Yudelman entered into a rental contract with BAJV for the rental of a Ford Falcon (registration FM8093) from BAJV.
57. On 2 July 2007, the rented Ford Falcon was involved in an accident with a vehicle driven by Sharon Burne.
58. On or about 11 July 2007, BAJV engaged in the Two Invoice Practice, obtaining a Higher Invoice in the amount of $575.39 (plus GST) and a Lower Invoice in the amount of $486.46 (plus GST). BAJV claimed $575.39 from Mrs Burne as referred to in paragraph 62 below.
59. On 29 August 2007, BAJV filed proceeding no. L40567/07 in the Magistrates Court of Tasmania (the Third Magistrates Court Proceeding) against Ms Burne seeking payment of $961.89, including as a particular of the claim $575.39 in repair charges and $261.50 in loss of hire. The contact person for BAJV listed on the Third Magistrates Court Proceeding was Ms Carr.
60. It was BAJV's usual practice to arrange for service of Magistrates Court claims, and, in accordance with that practice, Ms Carr arranged for service on Ms Burne.
Scott Targett
61. On or about 22 August 2009, rental customer Scott Targett entered into a rental contact with BAJV for the rental of a Toyota Commuter (registration AO6NG) from BAJV.
62. Between 22 August 2009 and 24 August 2009, the rented Toyota Commuter was damaged.
63. On 24 August 2009, BAJV obtained an estimate of $2000.52 for repairing the rented Toyota Commuter.
64. On 10 November 2009, BAJV sent a letter (prepared by Teressa Carr) to Mr Targett seeking reimbursement of repair costs based on "Estimated Repairs FT Guy Bodyworks" of $2000.52 and an "Admin Fee" of $64.02, totalling $2064.54.
65. On 26 November 2009, BAJV sent a further letter prepared by Teressa Carr to Mr Targett seeking payment of the total cost outstanding for repairs to the vehicle, being $2064.54 (incl GST).
66. On 4 December 2009, BAJV sent Mr Targett a notice of intention to sue that sought payment of $2064.54. The notice was prepared by Ms Carr.
67. On 10 December 2009, BAJV engaged in the Two Invoice Practice, obtaining a Higher Invoice in the amount of $2000.52 and a Lower Invoice in the amount of $1661.22.
68. On 11 March 2010, BAJV filed proceeding no.L40268/10 in the Magistrates Court of Tasmania (the Fourth Magistrates Court Proceeding) against Mr Targett seeking payment of $2926.54 and including as a particular of the claim $2000.52 in repair costs. The contact person on the Fourth Magistrates Court Proceeding was Ms Carr.
69. It was BAJV's usual practice to arrange for service of Magistrates Court claims by post, and in accordance with that practice, Ms Carr posted the claim however service was not effected as the letter was returned.
Lauren Smith
70. On or about 23 July 2010, rental customer Lauren Smith entered into a rental contract with BAJV for the rental of a Nissan Micra (registration B32NQ) from BAJV.
71. On 23 July 2010, the rented vehicle collided with a wallaby and was returned with damage.
72. On or about 20 August 2010, BAJV engaged in the Two Invoice Practice, obtaining a Higher Invoice in the amount of $2,463.22 and a Lower Invoice in the amount of $784.32.
73. On 2 September 2010, BAJV sent a letter (prepared by Teressa Carr) seeking payment of $3136.69 including repairs of $2,463.22 by FT Guy Bodyworks, towage costs of $569.80 and repairs of $129.80 performed by Tas Driveline.
74. On 8 December 2010, BAJV sent a further letter also prepared by Teressa Carr to Ms Smith seeking payment of $3136.69 (incl GST) for repairs to the rented Nissan Micra.
75. On 4 January 2011, BAJV sent Ms Smith a notice of intention to sue. The notice was prepared by Ms Carr.
76. On 8 July 2011, BAJV filed proceeding no.M/2011/3934 in the Magistrates Court of Tasmania (the Fifth Magistrates Court Proceeding) against Ms Smith seeking payment of $3136.69. The contact person on the Fifth Magistrates Court Proceeding was Ms Carr.
77. It was BAJV's usual practice to arrange for service of Magistrates Court claims by post, and in accordance with that practice, Ms Carr posted the claim however service was not effected as the letter was returned.
Julie-Anne Vincent
78. In mid to late 2009, rental customer Tom Ray entered into a rental contract with BAJV for the rental of a Toyota Aurion (registration A66LZ) from BAJV.
79. On or about 22 December 2009, BAJV engaged in the Two Invoice Practice, obtaining Higher Invoice in the amount of $401.24 (excl GST) and a Lower Invoice in the amount of $358.86 (incl GST). BAJV claimed the Higher Invoice amount as referred to in paragraph 80 below.
80. On 30 December 2009, BAJV sent a letter prepared by Ms Carr to Ms Vincent seeking payment of $947.29 (excl GST) which included FT Guy Bodyworks repair costs of $401.24 and loss of hire charges of $556.05.
81. On 8 January 2010 BAJV sent a letter (prepared by Ms Carr) to Ms Vincent seeking payment of $957.29 for repair of the rented vehicle.
82. On 3 August 2010, BAJV sent a letter (prepared by Ms Carr) to Ms Vincent seeking payment of $957.29 (excl GST) for repairs to BAJV's vehicle.
83. On 10 December 2010, BAJV sent Ms Vincent a notice of intention to sue. The notice was prepared by Ms Carr.
84. On 8 July 2011, BAJV filed proceeding no. M/2011/3928 in the Magistrates Court of Tasmania (the Sixth Magistrates Court Proceeding) against Ms Vincent seeking payment of $957.29 including damage rectification costs of $957.29. The contact person on the Sixth Magistrates Court Proceeding was Ms Carr.
85. It was BAJV's usual practice to arrange for service of Magistrates Court claims, and in accordance with that practice, Ms Carr posted the claim however service was not effected as the letter was returned.
Representations
86. During the relevant period, BAJV represented to each of the Renters who received a Damage Letter that each Renter was liable to BAJV for:
86.1. the Damage Charge as set out in the Damage Letter provided by BAJV to that Renter; and
86.2. the Damage Charge would be the estimated Cost of Repair
when this was not the case.7
87. During the relevant period, BAJV represented to Renters who received a Damage Letter that the Cost of Repair was or would be the Damage Charge when this was not the case.
88. During the relevant period, BAJV represented to each of the Renters who received a Damage Letter that if the Damage Charge charged to the Renter was greater than the Cost of Repair, BAJV would pay to the Renter an amount calculated by references to the difference between the Damage Charge and the Cost of Repair, when this was not the case.
89. During the relevant period:
89.1. the Europcar Website contained statements that:
'In the event of loss or damage to the vehicle or third party loss a Damage Liability Fee (DLF) will be charged for each separate event. This fee is charged regardless of who is at fault or the amount of damage. If the loss or damage is ultimately less than the DLF, part of the DLF will be refunded.'
and
89.2. BAJV thereby represented to consumers via the Europcar website that:
89.2.1. a rental customer would not be charged for loss and damage in excess of what was provided for under the terms of the Rental Agreement, when in fact BAJV sometimes did charge rental customers more than it was entitled under the Rental Agreement; and
89.2.2. if the amount BAJV charged a rental customer for the loss and damage was greater than what it was entitled under its Rental Agreement, the difference would be refunded to the rental customer, when this was not always the case.
90. From 2006, BAJV represented to consumers via the Europcar website that if a rental customer is involved in an accident involving the rented vehicle, the maximum amount charged would be a Damage Liability Fee, when this was not the case.
91. In circumstances where the following Renters:
91.1. Stuart Moore;
91.2. Justin Tiew;
91.3. customer with rental agreement number 53193631 (Ms M);
91.4. Denis Durham;
91.5. Harry Wood;
91.6. Wilma Baird; and
91.7. Susan Cross,
returned a rental vehicle to BAJV with accident damage caused in an accident with a third party, by providing each of these Renters with a Damage Letter containing a specified Damage Charge, BAJV represented to the Renter that they were liable to BAJV for the Damage Charge, when this was not the case as set out below.
92.1. on or about 12 May 2010, represented to Stuart Moore and to Mr Moore's insurer, Cover More Insurance Services, that the Cost of Repair in respect of accident damage to a vehicle rented by Mr Moore was $620.40 when, in fact, it was only $530.61;
92.2. on or about 29 and 30 April 2010, represented to Jason Tiew that the Cost of Repair in respect of accident damage to a vehicle rented by Mr Tiew was $1583.85, when, in fact, it was only $1043.88;
92.3. in or about late January 2010, represented to Susan Cross that the Cost of Repair in respect of accident damage to a vehicle rented by Ms Cross was $703.26, when, in fact, it was only $612.55;
92.4. on or about 28 May 2010, represented to Marc Sward that the Cost of Repair in respect of damage to a vehicle said by BAJV to have been negligently caused by Mr Sward (who had been involved in an accident with a renter of the vehicle), that the Cost of Repair was $1716, when, in fact, it was only $1544.40;
92.5. on or about 2 June 2010, represented to Craig Martin that the Cost of Repair in respect of damage to a vehicle said by BAJV to have been negligently caused by Mr Martin (who had been previously involved in an accident with a renter of the vehicle), that the Cost of Repair was $911.93, when, in fact, it was only $812.93;
92.6. from the date on which accident damage to a vehicle rented by Susan Cross was repaired in or about late January 2010 until 13 September 2010, represented to Ms Cross as a continuing representation by its silence, that it was not obliged to refund to her any part of the Damage Charge paid by her in respect of the accident damage, when this was not the case;
92.7. on or about 22 April 2010, represented to Thrifty that the Cost of Repair in respect of damage to a vehicle said by BAJV to have been caused by Anne-Claire Louvet while driving a vehicle rented from Thrifty was $951.07 when, in fact, it was only $798.63; and
92.8. on or about 26 March 2010, represented to Wilma Baird that the Cost of Repair in respect of accident damage to a vehicle rented by Ms Baird was $511.50, when, in fact, it was only $460.35.
93.1. on or about 9 January 2010, represented to Ms M that it had provided her with a refund which included an allowance in her favour of the full amount of the difference between the Damage Charge paid by Ms M and the Cost of Repair, when this was not the case and, in fact, BAJV should have paid a refund of at least a further $99.08 to Ms M;
93.2. represented to Denis Durham that it had provided him with a refund which included an allowance in his favour of the full amount of the difference between the Damage Charge paid by Mr Durham and the Cost of Repair, when this was not the case and, in fact, BAJV should have paid a refund of at least a further $396.39 to Mr Durham;
93.3. on or about 25 May 2010, represented to Harry Wood that it had provided him with a refund which included an amount in his favour of the full amount of the difference between the Damage Charge paid by Mr Wood and the Cost of Repair, when this was not the case and, in fact, BAJV should have paid a refund of at least a further $262.79 to Mr Wood; and
93.4. on or about 26 March 2010, represented to Wilma Baird that it had provided her with a refund which included an amount in her favour of the full amount of the difference between the Damage Charge paid by Ms Baird and the Cost of Repair, when this was not the case and, in fact, BAJV should have paid a refund of at least a further $102.30 to Ms Baird.
Conduct of BAJV
94.1. engaged in the conduct with respect to the Non-Refund Conduct, Standard Charges, Minor Damage and damage arising out of accidents with third parties referred to in paragraphs 29 to 38 above; and
94.2. implemented the Two Invoice Practice referred to in paragraphs 39 and 40 above,
being conduct and practices:
94.3. that had one or more of the following effects:
94.3.1. concealing from rental customers that the Damage Charge was more than the Cost of Repair;
94.3.2. increasing the amount of money collected by BAJV in respect of accident damage to a sum greater than the Cost of Repair;
94.3.3. increasing the amount of money retained by BAJV in respect of accident damage to a sum greater than the Cost of Repair; and
94.3.4. enabling BAJV to retain money to which it was not entitled; and
94.4. the implementation of which constituted the use by BAJV of unfair tactics,
in circumstances where:
94.5. BAJV had substantial knowledge and experience in relation to assessing the seriousness of accident damage, the repair process and the likely costs of repairing the accident damage;
94.6. rental customers did not, or alternatively could not be reasonably expected to have, any substantial knowledge or experience in respect of the costs of repairing vehicle damage or the likely costs of repairing the accident damage;
94.7. the details of the accident damage provided to rental customers in the tax invoices, Damage Letters and payment records issued by BAJV was expressed in terms of BAJV's own damage coding system and, accordingly:
94.7.1. was not readily understandable by rental customers;
94.7.2. did not readily allow rental customers to understand the precise nature or extent of the accident damage; and
94.7.3. the circumstances identified in 94.6 above made it more difficult for the rental customer to assess the likely cost of repairing the accident damage;
94.8. it was a term of the rental contract that the rental customer authorised BAJV to charge all moneys payable under the rental contract to the rental customer's credit card;
94.9. at about the time that BAJV prepared the tax invoice specifying the Damage Charge for each rental customer, it charged the rental customer's credit card and, accordingly, received payment from the rental customer, without the rental customer having to provide additional authority for the charge;
94.10. Rental customers were:
94.10.1. often not present at the time of BAJV identifying the accident damage and charging the rental customer's credit card in respect of the damage;
94.10.2. often not aware of the accident damage and/or the charge made to their credit card by BAJV until subsequently receiving the tax invoice and notification from BAJV that their credit card had been charged; and
94.11. the amount of the Damage Charge was also relevant to the amount of additional fees and charges paid to BAJV by the rental customer because the fees and charges, including an additional credit card fee were calculated by BAJV by reference to total of the tax invoice which included the Damage Charge.
95. BAJV’s supply of a rental vehicle on each of the occasions set out above was a supply of a service, or alternatively a good, that was of a kind ordinarily acquired for personal, domestic or household use. Further, the price at which the rental vehicle was supplied on each occasion was less than $40,000.
96. The conduct set out in paragraphs 19 to 85 above was engaged in, and each of the representations set out in paragraphs 86 to 93.4 above was made by BAJV, in trade or commerce, in the course of operating the Tasmanian Europcar Business.
97. Insofar as the representations referred to in paragraphs 86 to 91 were representations as to a future matter, BAJV did not have reasonable grounds for making those representations.
Conduct of Mr Ayers
98. Mr Ayers:
98.1. directed, oversaw and implemented the conduct and practices described in paragraphs 29 to 40 above, by which BAJV charges rental customers in relation to accident damage, and determining the circumstances under which such rental customers will receive any refund;
98.2. directed staff as to the application of BAJV's systems for charging rental customers in relation to accident damage.
Conduct of Ms Carr
99. Ms Carr:
99.1. was the person with responsibility for the administration of repair to damage incurred to BAJV's rental vehicles;
99.2. sent the correspondence referred to in paragraphs 46, 92.1, 92.2, 92.4, 92.5 and 92.8 above.
Part 4: Admissions
Misleading and deceptive conduct and misrepresentations
100. By reason of the matters set out above, BAJV admits, for the purpose of this proceeding only, that:
100.1. by engaging in the conduct referred to in paragraph 86, it:
100.1.1. engaged in conduct which was misleading or deceptive or likely to mislead or deceive in contravention of section 52 of the TPA; and
100.1.2. in connection with the supply or possible supply of goods and / or services, made a false or misleading representation with respect to the:
a. price of goods and/or services, in contravention of section 53(e) of the TPA; and
b. existence of a condition, right or remedy in contravention of section 53(g) of the TPA;
100.2. by engaging in the conduct referred to in paragraph 87,it:
100.2.1. engaged in conduct which was misleading or deceptive or likely to mislead or deceive in contravention of section 52 of the TPA; and
100.2.2. in connection with the supply or possible supply of goods and / or services, made a false or misleading representation with respect to the price of good and/or services, in contravention of section 53(e) of the TPA.
100.3. by engaging in the conduct referred to in paragraph 88 it:
100.3.1. engaged in conduct which was misleading or deceptive or likely to mislead or deceive in contravention of section 52 of the TPA; and
100.3.2. in connection with the supply or possible supply of goods and / or services, made a false or misleading representation with respect to the:
a. price of goods and/or services, in contravention of section 53(e) of the TPA; and
b. existence of a condition, right or remedy in contravention of section 53(g) of the TPA;
100.4. by engaging in the conduct referred to in paragraph 89 it:
100.4.1. engaged in conduct which was misleading or deceptive or likely to mislead or deceive in contravention of section 52 of the TPA and section 18 of the Australian Consumer Law (ACL) (which is Schedule 2 to the Competition and Consumer Act 2010 (Cth) (CCA); and
100.4.2. in connection with the supply or possible supply of goods and / or services, made a false or misleading representation with respect to the:
a. price of goods and/or services, in contravention of section 53(e) of the TPA and section 29(1)(i) of the ACL; and
b. existence of a condition, right or remedy in contravention of section 53(g) of the TPA and section 29(1)(m) of the ACL;
100.5. by engaging in the conduct referred to in paragraph 90 it:
100.5.1. engaged in conduct which was misleading or deceptive or likely to mislead or deceive in contravention of section 52 of the TPA and section 18 of the ACL; and
100.5.2. in connection with the supply or possible supply of goods and / or services, made a false or misleading representation with respect to the price of goods and/or services, in contravention of section 53(e) of the TPA and section 29(1)(i) of the ACL;
100.6. by engaging in the conduct referred to in paragraph 91 it:
100.6.1. engaged in conduct which was misleading or deceptive or likely to mislead or deceive in contravention of section 52 of the TPA; and
100.6.2. in connection with the supply or possible supply of goods and / or services, made a false or misleading representation with respect to the:
a. price of goods and/or services, in contravention of section 53(e) of the TPA; and
b. existence of a condition, right or remedy in contravention of section 53(g) of the TPA;
100.7. by engaging in the conduct referred to in paragraph 92 it:
100.7.1. engaged in conduct which was misleading or deceptive or likely to mislead or deceive in contravention of section 52 of the TPA; and
100.7.2. in connection with the supply or possible supply of goods and / or services, made a false or misleading representation with respect to the price of goods and/or services, in contravention of section 53(e) of the TPA; and
100.8. by engaging in the conduct referred to in paragraph 93 it:
100.8.1. engaged in conduct which was misleading or deceptive or likely to mislead or deceive in contravention of section 52 of the TPA; and
100.8.2. in connection with the supply or possible supply of goods and / or services, made a false or misleading representation with respect to the price of goods and/or services, in contravention of section 53(e) of the TPA;
100.9. by engaging in the conduct referred to in paragraph 94 it engaged in conduct, in trade or commerce, in connection with the supply of goods and / or services to persons that:
a. was, in all the circumstances, unconscionable, in contravention of section 51AB of the TPA and section 21 of the ACL and
b. was misleading or deceptive or likely to mislead or deceive in contravention of section 52 of the TPA, insofar as the conduct occurred before 1 January 2011 and section 18 of the ACL, insofar as the conduct occurred on or after 1 January 2011;
100.10. by engaging in the conduct referred to in paragraphs 41 to 85, it:
100.10.1. engaged in conduct which was misleading or deceptive or likely to mislead or deceive in contravention of:
a. section 52 of the TPA, insofar as the conduct occurred before 1 January 2011; and
b. section 18 of the ACL, insofar as the conduct occurred on or after 1 January 2011; and
100.10.2. in connection with the supply or possible supply of goods and / or services, made a false or misleading representation with respect to the price of goods and/or services, in contravention of:
a. section 53(e) of the TPA, insofar as the conduct occurred before 1 January 2011; and
b. section 29(1)(i) of the ACL, insofar as the conduct occurred on or after 1 January 2011.
Unconscionability
101. In the circumstances set out at paragraphs 19 to 40 above, by engaging in the conduct set out in paragraphs 41 to 93 BAJV admits that, for the purpose of this proceeding only, it engaged in conduct in trade or commerce, and in connection with the supply of goods or services to a person, that was, in all the circumstances, unconscionable in contravention of:
101.1. section 51AB of the TPA, insofar as the conduct occurred before 1 January 2011; and
101.2. section 21 of the ACL, insofar as the conduct occurred on or after 1 January 2011.
Mr Ayers
102. By reason of the matters described at paragraphs 12 and 19 to 40 above, Mr Ayers admits that, for the purpose of this proceeding only, he:
102.1. aided, abetted, counselled or procured; and/or
102.2. was knowingly concerned in or party to; each of the contraventions by BAJV described at paragraphs 100 to 101 above.
Ms Carr
103. By reason of the matters described at paragraphs 13 and 19 to 40 above, Ms Carr:
103.1. in her role as the person with responsibility for the administration of repair to damage incurred to BAJV's rental vehicles; and
103.2. by sending relevant correspondence to the rental customers was involved in, or party to:
103.2.1. the contraventions of section 52 of the TPA referred to in paragraphs 100.3.1 and 100.8.1;
103.2.2. the contraventions of section 52 the TPA and section 18 of the ACL referred to in paragraph 100.7.1 above as they relate to paragraphs 46, 92.1, 92.2, 92.4, 92.5 and 92.8.
Fraud
104. The ACCC accepts that the conduct of the Respondents did not involve fraud, and accordingly does not press the allegations referred to in paragraphs 31, 68, 77, 85, 101, 109, 109B, 119, 131, 131I, 137N, 137W, 137AG, 137AP, 137AZ, and 146(a)(v) of the Amended Statement of Claim to the extent that those allegations are of fraud.
Schedule 1
1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 |
No. | Renter | Hire date | Vehicle (model & registration) | DLF | Return date | Date of Tax Invoice | Damage Charge | Repair Cost | Amount of Refund* |
Ashley Paterson | 21/12/06 | Mitsubishi Outlander FL6225 | $1500 | 2/1/07 | 2/1/07 | $1045 | $909.27 | $0 | |
Joshua Ross | 18/6/07 | Honda Civic FL7602 | $2750 | 2/7/07 | 2/7/07 | $851.32 | $316.80 | $0 | |
Graham Heath | 23/6/07 | Mitsubishi Outlander FM5479 | $1650 | 7/7/07 | 7/7/07 | $198 | $40 | $0 | |
Peter Heydon | 17/1/08 | Subaru Outback FS3226 | $2750 | 26/1/08 | 26/1/08 | $1100 | $175 | $0 | |
Tak Wong | 10/7/08 | Hyundai Getz FR1052 | $330 | 15/7/08 | 15/7/08 | $330 | $144 | $0 | |
John Weatherall | 24/11/09 | Mitsubishi Lancer A61JR | $2750 | 1/12/09 | 1/12/09 | $275 | $30 | $0 | |
Axel Guthner | 25/11/09 | Hyundai Getz B00AV | $2750 | 18/12/09 | 18/12/09 | $275 | $30 | $0 | |
Rental Agreement number 53192297 | 30/11/09 | Hyundai Getz B01BS | $2750 | 14/12/09 | 14/12/09 | $537.24 | $358.85 | $0 | |
Yasmin Abadi | 9/12/09 | Toyota Kluger B57CU | $3300 | 23/12/09 | 23/12/09 | $176 | $66 | $0 | |
Joseph Mathew | 22/12/09 | Hyundai Getz A79ZS | $330 | 26/12/09 | 26/12/09 | $176 | $66 | $0 | |
Jesse Scott | 22/12/09 | Toyota Kluger B56CU | $3300 | 23/12/09 | 23/12/09 | $3300 | $798.63 | $0 | |
Annette Blunt | 25/12/09 | Nissan Tiida B82BN | $3300 | 3/1/10 | 3/1/10 | $478 | $200 | $0 | |
Rental Agreement number 53193631 | 25/12/09 | Mazda M3 B52EW | $3300 | 3/1/10 | 3/1/10 | $3300 | $807.01 | $2485.87 | |
David Walton | 26/12/09 | Audi A3 A40ZC | $330 | 9/1/10 | 9/1/10 | $330 | Less than $110 | $0 | |
Nie Chang Li | 27/12/09 | Mitsubishi Lancer A45MT | $2750 | 2/1/10 | 2/1/10 | $660 | $99 | $0 | |
Susan Cross | 2/1/10 | Nissan Xtrail B76FC | $3300 | 10/1/10 | 10/1/10 | $3300 | $612.55 | $3149.87 | |
Denis Durham | 6/1/10 | Toyota Corolla A39PO | $2750 | 13/1/10 | 14/1/10 | $2200 | $1020.42 | $438.10 | |
Robert Byrne | 8/1/10 | Mazda M3 B50EW | $3300 | 14/1/10 | 14/1/10 | $988.79 | $627 | $0 | |
Claire Knight | 8/1/10 | Mitsubishi Lancer A74JR | $3300 | 19/1/10 | 19/1/10 | $399.30 | Less than $132 | $0 | |
Peter Golding | 10/1/10 | Nissan Tiida A47KQ | $3300 | 19/1/10 | 19/1/10 | $660 | $66 | $0 | |
Alan Gould | 20/1/10 | Hyundai Getz A93MN | $3300 | 25/1/10 | 25/1/10 | $96.80 | $0 | $0 | |
Paul Packard | 23/1/10 | Hyundai Getz A46SJ | $2750 | 28/1/10 | 28/1/10 | $220 | $65.71 | $0 | |
Marc Brunet-Watson | 4/2/10 | Toyota Kluger A72PT | $2750 | 13/2/10 | 13/2/10 | $990 | $220 | $0 | |
Rental Agreement number 53195612 | 4/2/10 | Nissan Xtrail B79FC | $3300 | 8/2/10 | 8/2/10 | $3300 | $511.39 | $0 | |
Catherine Beehag | 22/2/10 | Kia Carnival B57DJ | $1100 | 19/3/10 | 19/3/10 | $275 | $30 | $0 | |
Stuart Moore | 8/3/10 | Toyota Corolla B69FF | $3300 | 17/3/10 | 17/3/10 | $3300 | $530.61 | $2798.68 | |
Wilma Baird | 13/3/10 | Nissan Xtrail B90FC | $3300 | 21/3/10 | 21/3/10 | $1650 | $460.35 | $981.27 | |
Michael Ewers | 19/3/10 | Nissan Tiida B92EQ | $3300 | 30/3/10 | 30/3/10 | $358.60 | Less than $180 | $0 | |
Harry Wood | 21/3/10 | Nissan Tiida A91KO | $3300 | 28/3/10 | 28/3/10 | $3300 | $1436.97 | $1409.64 | |
Kenneth Pepyat | 22/3/10 | Toyota Corolla B35FF | $3300 | 26/3/10 | 26/3/10 | $275 | $135 | $0 | |
Anna Mackereth | 25/3/10 | Nissan Tiida A90ZR | $330 | 4/4/10 | 4/4/10 | $330 | Less than $132 | $0 | |
Gillian McNairn | 2/4/10 | Audi A3 B26EE | $3300 | 5/4/10 | 6/4/10 | $354.04 | $222.62 | $0 | |
Edward Price | 3/4/10 | Hyundai Getz A91YD | $3300 | 10/4/10 | 10/4/10 | $550 | $220 | $0 | |
Mark Mathews | 5/4/10 | Toyota Hilux FS8418 | $990 | 6/4/10 | 7/4/10 | $275 | $30 | $0 | |
Justin Tiew | 6/4/10 | Mitsubishi Lancer A42MT | $3300 | 11/4/10 | 12/4/10 | $3300 | 1043.88 | $1190.76 | |
John Haygarth | 8/4/10 | Audi A3 A39ZC | $3300 | 14/4/10 | 14/4/10 | $814 | $415.94 | $0 | |
Margaret Jackson | 9/4/10 | Hyundai Getz A95YD | $3300 | 11/4/10 | 11/4/10 | $770 | $334.50 | $0 | |
Jill Bickford | 12/4/10 | Toyota Corolla B52FF | $2750 | 29/4/10 | 29/4/10 | $157.30 | $66 | $0 | |
Christopher Parris | 14/4/10 | Nissan Tiida A51ZT | $3300 | 18/4/10 | 18/4/10 | $275 | $135 | $0 | |
Leslie Hunt | 17/4/10 | Toyota Corolla B79FF | $330 | 30/4/10 | 30/4/10 | $330 | Less than $220 | $0 | |
Ka Wai Andy Cheung | 19/4/10 | Audi A3 A44ZC | $3850 | 23/4/10 | 23/4/10 | $275 | $30 | $0 | |
Rental Agreement number 53199367 | 21/4/10 | Subaru Forester B95EE | $3850 | 23/4/10 | 23/4/10 | $275 | $135 | $0 | |
Liana Fenech | 30/4/10 | Nissan Xtrail B97EQ | $3850 | 2/5/10 | 2/5/10 | $275 | $30 | $0 | |
Peter Casson | 3/5/10 | Nissan Tiida B82BN | $3850 | 3/5/10 | 3/5/10 | $3850 | $1544.40 | $2373.73 | |
Hajime Kitamura | 7/5/10 | Hyundai Getz A93ZS | $0 | 11/5/10 | 11/5/10 | $5610 | 5,306.26 | $0 | |
Joyce Matheson | 14/5/10 | Toyota Corolla A44PO | $3850 | 19/5/10 | 19/5/10 | $157.30 | $66 | $0 |
*Calculated by reference to BAJV's stated Cost of Repair. Includes amounts refunded in respect of fees and charges.
The Trade Practices Act 1974 (Cth) (TPA) was renamed the CCA as of 1 January 2011 by the Trade Practices Amendment( Australian Consumer Law) Act (No. 2) 2010.
'Cost of Repair' means any amount paid by BAJV to a repairer or parts supplier in respect of accident damage to a vehicle.
A letter issued by BAJV to its rental customer in respect of accident damage that includes a Damage Charge.
The amount contained in the Damage Letter and referred to therein as the 'Total Damage Charges' plus GST.
The fees and charges (in addition to the Damage Charge) referred to in the Damage Letter and which are calculated by reference to the Damage Charge.
'Minor Damage' means accident damage that was capable of being repaired by on-site repairers.
Renters who received a Damage Letter are those listed in Schedule 1, with the exception of the Renters listed in rows 1, 3, 4, 12, 14, 22, 24, 31, 35, 42 and 45.
