Commodore Homes (WA) Pty Ltd, a member of the Buckridge Group of companies, had breached the consumer protection provisions of the Trade Practices Act 1974, the Federal Court found today.
In settling the action with the Australian Competition and Consumer Commission, Commodore Homes also voluntarily refunded $882,124 to 264 new home buyers.
The Court found that Commodore Homes had misled new home buyers about the time taken to build their new homes and the application of Goods and Services Tax to their home contracts.
The ACCC had alleged that in the lead-up to the introduction of the GST, Commodore Homes represented to potential homebuyers that if they signed up with Commodore Homes, they would have their homes built by 1 July 2000, and would therefore avoid having to pay any GST. Delays in construction of the new homes meant, however, that many homes were, in fact, not completed by that date and Commodore Homes tried to recover the GST component.
The ACCC alleged that the representations made by Commodore Homes amounted to false, misleading or deceptive conduct.
The Court granted, by consent:
- declarations that Commodore Homes' conduct breached the Act
- injunctions restraining Commodore Homes from engaging in such conduct for three years
- orders that Commodore institute a trade practices compliance program
- costs.
"The ACCC welcomes the outcome as many of the Commodore customers are already struggling first home buyers", Acting ACCC Chairman, Mr Rod Shogren, said today. "These new home buyers have had the extra burden lifted of paying any additional GST amount on their new homes when they had been misled into believing their new homes would be completed before the introduction of the GST on 1 July 2000 and therefore would not have to pay any GST. The GST enforcement objectives will continue to be a priority for the ACCC until the expiration of the GST transition period on 30 June 2002".